Being a landlord is not an easy task, especially if it’s your first time managing a property. But more and more people are getting into real estate investment and management — in fact, between 2012 and 2017, the property management industry grew 4.4%. With this much growth, it’s important first-time property managers know some basics about landlord best practices. So here are a few tips to help you avoid making some big mistakes as a landlord.
First off, it’s important to understand that real estate investment doesn’t produce magical money right away. So you should make sure you’re not becoming a landlord for instant money, because that’s not going to happen. While rental properties can bring in a lot of money when managed properly, mortgages and maintenance fees need to be paid before you’ll see a lot of income.
Additionally, it’s absolutely crucial that you maintain an organized bookkeeping process. All purchases, payments, and materials used should be kept track of in an orderly fashion. It’s also a good idea to keep all of your documents as digital copies. Data from the Gartner Group shows that 15% of all paper documents end up being misplaced — so keeping digital copies can help you avoid losing important information.
When it comes to choosing tenants, it’s important to have a detailed screening process. Finding good tenants may be one of the most difficult aspects of being a landlord. This process should include checking credit scores, job history, and other important details related to their ability to pay rent. You should also know how many people will be living in the house as well as any animals they’ll have with them. Getting good tenants will help make your job as a landlord much easier.
Efficiency is key when you’re managing a property, especially if you have more than one. With that in mind, it’s important to streamline your processes as best as possible. Whether you’re showing your property to potential renters, collecting rent, or scheduling maintenance services, efficiency is a key element to keep in mind. When you’re more efficient and combine tasks when possible, you’ll save time and money that can be used elsewhere.
And lastly, you should try to make improvements to your rental properties whenever possible. While money and time don’t always allow for this, making even small improvements can save you money down the line. Could you install solar panels to cut energy costs? Could you add an addition for another bedroom? It’s important to always be thinking about how you could make the property better and therefore make yourself more money.
It takes some time to get used to balancing all the tasks a landlord has to manage. But with these few tips, you’ll be off to a great start.