Having rental properties is like a dream come true for many people. And, quite frankly, why wouldn’t it be? Rental properties just sit there, and you collect your checks once a month, right?
Well, not quite.
If you believe rental properties are nothing more than money printing assets – you’re wrong. That’s a beginner’s mistake, and we’re not here for those.
Managing a rental property takes a lot more work on your end than you might think. If you want to avoid beginner mistakes and keep the money flowing, you’ll want to read the rest of this article. We’re sure you’ll find it more than helpful once you finish reading it.
Research The Market
Researching the market is vital whether you’re looking to purchase a rental property or rent the one you already own.
You’ll want to figure out several things during this phase. You’ll want to know what the average value of the property is, the median income of families living in the area, average family size, average rental price, and more.
Knowing all of this will help you choose the best property to purchase, as well as set an appropriately high rent.
Set An Appropriate Price
Speaking of appropriate rent, this is also one of the things you’ll have to do correctly early on.
You’ll want the rent to fit the following categories:
- Market appropriate
- Value appropriate
What do all of those mean?
For starters, an appropriate market price would be the one that matches similar properties in the area, but also the one that matches the budget of families living in the area. You’ll be able to figure this out through research.
Value appropriate rent would be the one that matches the value of your property. Average rent in the area might be 2000 pounds, but if yours has a better TV, higher-quality furniture, is placed in a better location, is safe and secure, well then, you might as well raise it a bit.
And finally, you’ll want to make the rent appealing. You’ll want it to be just right so that when someone looks at the ad, they think, “Wow, that’s a good deal!”
You’ll find that this is much easier said than done. However, it’s doable.
Set Tenant Requirements
Just like the potential tenants are picking the properties they want to live in, you get to pick the tenants that may live in yours.
Set a list of requirements that you feel are appropriate and enforce them.
Common things property owners look at are:
- Minimum income
- Credit score
- Past references
- Rental history
- Smoking habits
However, there’s one thing to keep in mind. You can’t discriminate against tenants. That’s illegal.
While there’s nothing stopping you from being strict with your requirements, you can’t dismiss potentially great applicants based on race, skin colour, religious beliefs etc.
After you’ve figured out the basics – it’s time to put your property out there.
There are several ways for you to market your property. You can run social media ads, work out a deal with real estate agencies, or share your rental posting on websites and platforms like Helloguest. Putting an ad in local newspapers probably won’t work, so don’t waste your money on those.
Find A Good Tenant
Most likely, you will have a couple of candidates interested in your property.
Instead of just renting to the first person that comes up, try and come up with a “screening process”. Draw up an application form or a questionnaire prospective tenants should fill out and make your decision based on those. If you want and you have the time to do this – you may even schedule an interview.
If you don’t have the time or the will to do any of this – you may hire a third-party screening service that will handle this for you.
All of this, as time-consuming as it may be, will help you find a person you’re somewhat confident in. It’ll help you find someone that will pay rent on time, will take proper care of your property, and won’t cause any issues down the line.
Set Up A Sound Renting Contract
After you’ve selected your ideal candidate, you’ll have to draw up a rental contract.
If you’ve never done this on your own, it’s advisable that you look up how to do it or even consult with your lawyer to make sure you don’t miss anything important.
Remember, signing a contract is paramount. We can’t stress this enough.
Without it, you’re liable to lose your property rather fast because some of the people out there are more than familiar with squatting rights and are actively on the hunt for the next property they can poach.
Rent The Place
With the contract signed – you’ve officially rented your place.
At this point, you’ll become more of a passive member of this agreement, but that doesn’t mean you’re done with the place. Aside from picking up checks – there are a few other things you still have to do.
Be Readily Available
As a homeowner, you know how frequently things break. This month it’s the toaster oven, the next one it’s the leaking faucet… And in six months, who knows what might break next?
Therefore, either you or someone working for you has to be readily available in case something goes wrong with your rental property.
A good landlord is always there for its tenants.
Keep Properties Properly Maintained
Another thing you’ll have to do is schedule regular inspection and maintenance for your properties.
These don’t have to be frequent, but paying your property a visit once every six months to a year is an excellent way to ensure everything stays perfect for a long time. Popping once or twice a year to inspect plumbing or electrics will prevent major mishaps from happening.
Because, as we’ve just mentioned – things break. And, it’s up to you to stay on top of those.
Conclusion – Collect Rent And Enjoy
Finally, we’ve come to every landlord’s favourite part of the equation – collecting rent.
That is the final thing you have to do as a rental property owner and/or manager. And, it’s the most interesting bit out of all.
After you’ve done everything on your end, the only thing that’s left to do is sit back, relax, and enjoy the checks coming in.