There are many ways you can get your house to “make money” for you. The first would be to refinance your mortgage. That would allow you to pay off that debt quicker and get money back into your account. The second option would be to list your property on a site like AirBnB. You stand a better chance of picking up some extra cash if your home offers something unique to a world traveler. Living just outside of Disneyland wouldn’t hurt!
You can take the bold step of moving out of your home all together and setting it up as a rental property. Obviously, this involves a serious investment in time and money but it is the kind of business that can prove to be lucrative if you know what you’re doing. These five tips can help you become a successful landlord.
Tip #1: Set Your Policies
As the landlord, you’ll be the first call your tenant will make if something goes wrong. That doesn’t mean you have to be open 24/7. Renting a home or apartment is a business and you should treat it like a business. That starts with setting office hours. There is nothing wrong with telling a tenant you’re office hours are 9 to 5. After hours, they can leave a message. You can always check those messages or have them forwarded to your cell. Other policies you need to set involve how and when you accept rent payments. Once you establish a policy, don’t back down. Your cover is always, “Sorry, that’s the policy.”
Tip #2: Put Everything In The Lease
There are plenty of boilerplate lease agreements you can utilize to set up your rental business. However, you need to read those agreements carefully and make sure they cover all the issues you want covered. Things like a “no pet” or “no painting” rule should be in the lease. That same for late fees and your office policies (see above). There should be no doubt about what you expect from your tenant if it is in the lease.
Tip #3: Choose Your Tenants Wisely
It’s not a stretch to say that most renters “fudge” a little on their applications. They want to look impressive to you. The burden is on you to screen out the “bad apples.” That means running a credit check, making sure they have a stable source of income and that they don’t have any evictions or felonies on their record. Yes, everyone will seem “nice” when they come to look at your property but that doesn’t tell you anything. Best resource: Checking with their last landlord.
Tip #4: Be Respectful Of Your Tenants
When you hand the keys over to your tenant, you’re essentially putting them in charge of your property. If you treat them with respect, then they will treat your property with respect. That can start with letting them make the place their home. Just because you don’t like red walls doesn’t mean they wouldn’t like red walls. As long as you have an understanding (in the lease!) about what modifications they can make, and then let your tenants enjoy their “home.” This doesn’t mean you have to become friends with your tenants but a respect is a two-way street.
Tip #5: Line Up Your Service Personal
If you’re the kind of DIY landlord who likes to fix their own things, then have fun! However, you don’t want to get bogged down with all the potential repairs especially if you have another business to tend to. Instead, make sure you find yourself a dependable handyman, gardener and plumber who can be called on to take care of your tenant’s problems.
Hopefully, your experience as a landlord will be beneficial. It only takes a few income-generating properties to become a true real estate mogul!