As more and more people are becoming long-term renters, investing in rental property to become a landlord is skyrocketing in appeal. The allure is obvious, rental properties can represent an exceptional source of income and, with the right property and tenants, it can be a continual revenue stream that will allow you to continue to expand on your investment properties.
However, being a new landlord comes with a range of trials, triumphs and trip-ups. To be successful, you need to go into it with your eyes wide open. Be aware that being a landlord is not a passive income. From maintenance requests to dealing with tenant queries, it’s a business – so treat it like one.
Know the Laws Inside & Out
Rule #1: Educate thyself. Laws require more and more of landlords all the time. You have to keep on top of your rights as a landlord as well as the tenant’s right as a renter. Take time to read up, as well as consult with a lawyer to get a deep understanding of federal as well as local laws. In general, the three most frequent disputes from a landlord’s standpoint are: 1.) Non-payment of rent, 2.) Habitual late payments, and 3.) Disruptive tenants or property damage caused by tenants. Be sure to be fully educated on the rules and regulations related to these common challenges.
Document, Document, Document
And, in case you do run into the disputes mentioned above, a first-time landlord must have a system in place to document all landlord-tenant interactions. And, even if everything is going smoothly, you need to make sure you have the proper records for your financial reporting or to document the physical condition of your rental unit. Have all documents you need: the rental application form, the move-in inspection form, and the residential tenancy agreement. (If you use a standard lease, you may wish to review it with a lawyer and adjust it with an addendum to your needs and requirements – for example no pets, or penalty fees for late payment, etc.) And, because you always need to be prepared, you’ll need to have all legal forms related to the eviction process.
Always Screen Prospective Renters
Credit checks can seem time-consuming. And, if the landlord has met the prospective tenant and has a positive first impression, it can be tempting to skip this step. However, you need to ensure that you know who you are renting to, and that they can afford the monthly rent. No matter how well-dressed, what type of car the person drove, or where they work – never omit tenant screening. Quality tenants who have the ability to pay their rent month after month are essential to your net operating income. (Here at Property Vista we’ve teamed up with Equifax to deliver intelligent and leading-edge credit check protocols to reduce the risk of a poor resident choice – in just a matter of seconds. As well, all applicants, co-applicants and guarantors are analyzed so you can make informed leasing decisions.)
Don’t Accept Cheques
Not only is accepting paper cheques more costly – it can cost up to five times as much as digital payments – it is also leaves the door wide open to fraud and professional tenants. Equally, your tenant isn’t too fond of hauling out their Jurassic-era chequebook either. Paying bills online is the expected norm. So skip paper cheques in favour of a secure digital payment system that accepts e-transfers, credit cards or other reliable, automatic methods of payment. For example, our web-based property management software offers a safe and effective means of collecting payment from tenants.
Help Tenants Help Themselves
As people’s technology habits change, property management technology must change with it. Residents are demanding more self-service – more ways to do things themselves without having to pick up a phone or drop by the landlord’s office or house to request a repair or pay their rent. The more they can do on their phone or tablet the happier your resident will be.
Property Vista offers online reporting, customer portals and a wide variety of leasing and marketing tools to help you increase revenues across your portfolio – whether you have 10 units or 10,000.
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