Tips For First Time Landlords
February 7th, 2022
If this is your first time renting out a property and you're a first time landlord, then you're going to want to read through this because we've got a few things to share that we think are really important for you to consider and get lined up so that you can take care of your property the best way possible.
We manage hundreds of properties for other people, and I am also an investor myself. So I get it from both sides. And I can tell you, from our years of experience, there are a few things, especially for first time home buyers that you really need to know.
First of all, whether this is a pure investment, or if this is a home that you are going to rent out for a short term and eventually come back to, it doesn't matter. You are now a landlord, and you've got to start to make a little bit of a mental shift.
Think of yourself as a business owner, you want to maximize your revenues. You want to minimize your expenses. And at the same time you want to take care of your customer. That customer is your tenant. So let's look at this in three buckets and talk about a few things within each of those buckets that you really should care about.
First bucket, let's talk about the property. With the property itself, you want to make sure that it's physically maintained for the long haul. Inspections are a must! You want to make sure that you do proper inspections so you can address minor issues quickly and you can see how the tenant is taking care of the property and that they are complying with lease terms.
You also want to surround yourself with the right kinds of people who can help you manage the property. Handymen and Realtors who can help you lease are key. You’ll also need a variety of different kinds of vendors because you don't know what you're going to need. You'll need a good plumber and HVAC company. Consider putting service contracts in place so that your property is maintained over time. There are a number of things that tenants need to do, but sometimes they don't do them. So if you do things like this as a landlord, you help protect your property.
You want to make sure you do really, really good move-in inspections, good move out inspections and that midyear inspection. So think about the strategies around what you're going to do to physically take care of the inside and the outside of the property.
The second bucket is related to finances. That's one of the things that we really focus a lot on in our company. We focus on all these buckets, but the financial piece, obviously that's money in and money out.
First and foremost, we want to get our clients the most rent we can so doing a really good, detailed market analysis to know realistically what's a good rental price based on comparables and current market conditions is key.
Different markets will let us be more aggressive than other markets. We might have to tell owners that we need to list the home for rent it a little less that market rate because the market is really slow. So we are always in tune with what's going on and you need to keep up as well. Talk to a real estate professional, maybe engage the help of a real estate professional, because even though it will cost you some money, it will most likely help you get your property rented faster to a good tenant, and that will actually save you money in the long run.
So looking at all of the details and getting to the right rental value will help you decrease vacancy, get your property rented quickly and maximize your revenue.
On the expense side, you want good trusted vendors who you can call on if you have repairs, because it's not a matter of if you'll have repairs from the tenant, it's just when you'll have repairs. You want those vendors in line so you know they're honest, they respond, they are fairly priced and they won't take your money or spend your money when they don't need to. That obviously affects your bottom line. So things like that are really important when minimizing and managing your expenses.
The liability side, which is our third bucket, is one of the pieces that a lot of people don't think about. That's one of the reasons why we feel like we are an important partner in the world of our clients, because we do this every day because we stay up with tenant landlord laws in our area, in our state, in our local jurisdictions and we know what to do. We know who to call on when there are challenging situations that come up. So if you are going to be managing a property yourself, you need to make sure that you know what the laws are, what the rules are and make sure you're familiar with fair housing laws.
Make sure you don't violate those things because I can tell you from my experience as a real estate professional (I've been selling real estate since 1998) that the world of property management and landlord-tenant issues is much, much more litigious than anything in the real estate sales world. So it's really important that you keep up with those laws and just keep yourself knowledgeable. So again, if hiring a property management company is something that you're considering, I would highly recommend doing it. The money you spend for a management company is a really small price to pay when you're talking about what probably is one of your biggest assets that needs to be looked after. And remember too, that property management fees are one of those things that actually are tax deductible.
Whether you do it yourself or you hire the right professionals, you still know what's going on. And as a first time home buyer/investor, it is exciting, but just do your due diligence. Make sure you are a smart investor.
