Every established business had to start somewhere. So, if you’re considering the rental business to earn extra income, you’re in good company. The tricky thing about a new enterprise is that you don’t know what to expect. Here are some tips from seasoned landlords to start your rental business on the right foot.
1. Have Set Office Hours.
Early on, you may view your rental enterprise as a hobby. However, experienced landlords say this mindset is a mistake. From day one, realize you’re running a business. Establish reasonable office hours and protect your after-hours privacy by receiving business mail at a post office box instead of your home. You’ll also need to establish a backup or emergency contact to take care of things when you are out of the office.
2. Acknowledge your Shortcomings.
Doing everything yourself might save you money. But unless you’re a talented plumber, electrician, handyman, and CPA all rolled into one, you’ll probably have to rely on others’ expertise at least some of the time. Even if you do most of your upkeep, you’ll want reliable experts when you’re out of town, sick, or need a break.
3. Always Screen Prospective tenants.
Among surveyed landlords, this was their top tip! And don’t stop checking their criminal background and credit history. Do they have any past evictions? If so, think twice before allowing them to rent your property. Evictions cost a lot of money and take an emotional toll on everyone involved. You have better ways to spend your time!
4. Start Collecting Rent Right Away.
Before the tenant moves in, get a security deposit and the first month’s rent upfront. That way, you know you’ve primed the pump for receiving future payments. Don’t collect rent in person since renters may not answer the door. Make sure tenants drop off payments during your office hours or set up an online payment system. Be prepared to raise the rent occasionally to stay in the black and keep current with local rates.
5. Show Appreciation.
Good renters are hard to find. When you find a prospective tenant who passes muster, roll out the red carpet immediately. Send a welcome letter and a thoughtful welcome package, including coupons to local shops and restaurants.
6. Conduct Regular Inspections.
Start the lease by doing an initial unit walk-through, noting any pre-existing issues. Stay current with maintenance requests and inspect your units regularly to ensure they stay in good condition.
7. Count the Cost.
When you set your rental rates, compare them to other local rates. You want to stay competitive without undercutting your bottom line. When considering renovations, ensure they’ll save you in the long run or attract higher-paying renters.
8. Keep your Tenants Happy.
Even though you own the property, your rental unit is their home. Respect their privacy and never enter the unit without notice. Keep extra keys on hand to enter units during emergencies or make copies when renters lose theirs.
9. Know the Law.
Get in touch with an attorney to create a state-specific lease. And if your area has a landlord association, join it. You’ll want to stay abreast of legal issues like these:
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- Support animal policies.
- Fair Housing laws.
- Landlord-tenant laws.
- Eviction laws.
- Protected classes in your area.
- On-site injury liabilities.
10. Show Caring.
Even though you must protect your investment, be reasonable, kind, and compassionate. Renters will respect you for having rules, but you’ll gain their loyalty by showing them you care about them as people.
Becoming a landlord is a big step and not something you should take lightly. But learning from others is much cheaper than learning from your own mistakes. Remembering these ten tips can help you convert your rental property dream into a lucrative business.
About Rentals America
Rentals America provides full-service property management for residential rental properties. Our team is completely dedicated to property management, and we’re here to help landlords navigate the rental market.
