How to be a Landlord

Managing Rental Property

It's more lucrative than ever to learn how to be a landlord if you are looking for ways to generate income potential

With the downswing in the economy, while it isn't a "get rich quick scheme", the potential for a stream of income is tremendous. There are certain things you need to know before you take this leap into property ownership.

FINDING TENANTS

When figuring out how to be a landlord, one of the most important elements is to have the right tenants. Nothing will hurt a property owner quicker than non-paying and destructive tenants. The best way to find a serious renter is to look for someone who ultimately wants to be a home-owner if you are wanting to learn how to be a landlord with good tenants. By finding the right tenants through proper advertising and a strong credit check, you can eliminate bad experiences up front.

How do you do find the best tenants? When you advertise your home for rent, make it a "rent to own" . Have a stringent credit check for your tenants to make sure you believe they will qualify to a home loan at the end of the lease, and then give them an incentive to pay on time. One way you might do this is to make a portion of the rent applicable to a down payment when paid on time. Not only will this help you, but you will be helping your tenants as well.

You can find tenants through signs in the yard, newspaper advertisements, or online ads. Keep a record when you get calls to find out which method generates the most response in your area by asking callers how they heard about your property.

BACKGROUND AND CREDIT CHECKS

Having stringent background and credit checks to live in your property will help you avoid bad renters to help you when learning how to be a landlord. It is important that your policies are stated clearly before any credit check or background search is done.

The tenant credit check should look at income (the rental payment should not be more than 25-30% of the total income), debt ratio (does the tenant have maxed out credit), and delinquencies. If your first-come-first-served applicant doesn't meet your criteria, you can explain clearly why (based on credit) to avoid violating any fair-housing laws. It is imperative that you are compliant with laws when learning the ropes on how to be a landlord, in order to avoid lawsuits.

If you elect to do any background checks, it needs to be clearly stated in the beginning with equal policies for all renters (especially if you own multiple properties). Tell prospective tenants if you do a felony check, and if there is a felony have a limit on how old the offense must be before you can rent. Make a place on the application if you want an explanation for any felonies before running the credit check and background checks. Charge an application fee to pay for a service such as www.atenantscreen.com

ENFORCING RENTAL POLICIES

When signing a lease with new applicants, the best way to enforce rental policies is to have them clearly spelled out in the lease. Make sure each policy is initialed by every person on the lease before giving a key, and cover yourself for any defaults.

When learning how to be a landlord, it's helpful to know how long the legal process is if you should ever need to evict a tenant. Use this information to calculate a deposit. Some landlords require first and last month's rent, others simply a deposit. This will be up to you, but you want to make your rental accessible while still covering yourself financially and legally.

SAFETY MEASURES

When learning how to be a landlord, you will realize that you are in charge of the safety of your tenants and your property. There are state-specific laws you will need to become familiar with in order to comply with the law. Make sure that your property not only meets these laws - such as testing for lead paint, or the proper number of smoke detectors - not only for your tenants, but to protect your property as well. This will help you protect your investment as real estate prices rise.

INSURANCE FOR RENTAL PROPERTY

Don't overlook carrying the proper insurance on your rental properties. One of the biggest elements to be a landlord is to make sure you protect your investment. Search rates among different providers to find the most economical rate for your property. By making sure you have covered the safety measures, your insurance should be reflect your precautions.

By taking the proper steps in credit check and background info, learning how to be a landlord doesn't have to be as hard as some people tell you. Take the time to do things right, because with rental properties, your mistakes can have a big price tag. Do your research, and don't run into the landlord business without clear expectations of what you want to achieve.

Have A Funny Story About Landlording?

Do you have a great story about being a landlord? Share it! Being a landlord can be stressful when things aren't going well. But in hindsight when you can laugh at these situations, it helps put everything in perspective.

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