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I know a lot of people who choose to rent out their properties instead of selling them. Not everyone is cut out to be a landlord, and I sometimes see people making mistakes that can cause a lot of turbulence in the process. I have four tips to help you through this process.
1. Not doing a proper financial check on your applicant: We always recommend obtaining a credit report with FICO scores and eviction checks. We also like to have a pay stub and a bank statement to ensure that the applicant is financially capable of paying for the property.
2. Not knowing the law: Tenants are afforded a bevy of rights, and you need to know when you or your tenants are overstepping your bounds. Consult an attorney if you need to, because these issues can become dicey. Research your local laws as well as national ones.
3. Not maintaining your property: Landlords often don't want to spend any money on their proeprties, but this doesn't make sense to me. It's your biggest investment, so make repairs when necessary. Ideally you can be proactive so that nothing disastrous happens, and tenants appreciate someone who keeps things in working order. You might be surprised at how your relationship will improve if you put more effort into maintaining your property. Yearly inspections are generally something that we recommend.
4. Renting your property for less than it's worth: This seems pretty logical, but a lot of landlords charge less than they should. You don't want to have to pay down the mortgage, that is the job of your tenants. Run a rental analysis in the neighborhood to ensure that you're keeping your rent in line with the market.
As a real estate broker and property manager I take a lot of pride in helping people with their real estate issues. Please don't hesitate to contact me with any questions or comments.
I look forward to speaking with you!
