If you're new to the world of investment properties and you've never been a landlord before, there are some useful tips you should know about before you start posting up rental properties and allowing the tenants to move in. You don't want to make any costly mistakes that would cause you a lot of frustration, stress, and money. In fact, your primary goal should be to provide people with a comfortable space to live while earning passive income and addressing any concerns the tenants have while they're living inside of your properties.
1. Get Help From a Real Estate Lawyer With Landlord/Tenant Agreements
Before you start looking for potential tenants, work with a real estate lawyer who can write out an informative landlord/tenant agreement for you and your tenants to sign. The agreement is also referred to as a lease for the tenants. It tells them what they can and can't do inside the property. For example, you may want to make sure tenants aren't smoking or painting the walls. You may not mind if the tenants make renovations. These are some of the many things that must be thoroughly explained in the agreement before anyone signs it.
2. Always Set Aside Some of the Money You're Earning
Before you set a monthly rental price, consider the fact that you'll need to set aside roughly 10% of the total amount of rent each month. The reason you should set aside a small percentage of the earnings each month is because you just never know when you'll need to repair something that could cost some money. Instead of dipping into your personal funds, you can have a separate account set aside with money in it that would be used solely for any repairs or renovations that must be made.
3. Have an HVAC Contractor on Speed Dial to Perform Routine AC Maintenance
It's better to keep equipment properly maintained than to neglect the equipment and end up with costly repairs. If the homes you're renting out have HVAC systems, you should hire an HVAC contractor and have him or her come out at least once a month or once every other month to perform routine AC maintenance. The contractor could clean out all the filters, remove any dust particles, and check to make sure all the different parts of the system are still in good working condition. If the system in each home you're renting out is properly maintained, you'll save more money in the long run because you won't have to worry as much about costly repairs or replacements.
There are many things you'll need to learn now that you're going to be a landlord. These are just some of the different tips that may be useful to you as you start taking on this new job role.