You buy property at a good price, patch up a few holes in the walls, add fresh paint and rent it out to three tenants each paying $1,000 a month. Half of that income covers your mortgage and the other half goes into your pocket. Sounds easy enough, right? While I encourage these kinds of investments, it’s crucial to know the burdens that come with being a landlord. The following tips from Trulia can help you become the savviest landlord on the block:
1. Buy rental property near your home or office.
Just like in your own home, a rental property is bound to have its fair share of complications. Leaky faucets, broken toilets and even pest control are all issues that you or a hired contractor will have to handle in a timely manner. The closer you are to the property, the easier it is to get there and fix minor problems before they become major, costly issues.
2. Understand landlord-tenant laws in your city or suburb.
If you only take away one point from this post, this is it. I can’t stress enough how important it is to understand landlord laws. Visit the City of Chicago website for more information on rental rights. You don’t want to get sued!
3. Screen tenants.
I highly recommend running credit checks, background checks and setting up interviews with potential tenants. This might sound over the top but it’s crucial for the resale value of your property. If a tenant destroys the place, it’ll cost you more money in the long run. Meanwhile, the eviction process is expensive and time-consuming. This initial tenant evaluation is worth your time and money.
4. Check your property on a monthly basis.
In fact, if you have the time, check your property on a bi-weekly basis. Drive by every two weeks and stop inside once a month. This is especially important with new tenants. Before a new tenant moves in be sure to take interior and exterior photos.
5. Customize the lease.
Not all leases are created equal! It’s essential that your lease fits your property, your association or community requirements, and your own needs. You can tweak a standard lease form from Nolo or hire an attorney or property manager to create one.
Click here for more information on landlord best practices, and comment below if you have additional landlord tips.
Photo taken from Rentalo.com.