Are you fortunate enough to own property other than your primary residence? If so, you should certainly consider converting one of your properties into rental units and becoming a landlord.
While converting your home into a rental property requires careful planning, it can be a simple and enjoyable way to earn extra income.
The extra work of maintaining more than one home isn't too much of a burden when you have rental income to support your expenses.
Another advantage is diversifying your asset investments. Aside from channeling your savings into high interest bank accounts and stocks, investing in real estate is also a lucrative way to grow your wealth.
Tips for Property Owners Considering Becoming Landlords
Find Out If There's a HOA
While the thought of going right ahead and accepting tenants sounds exciting, conduct research first. Is your neighborhood under a Homeowners Association?
Some HOA’s have specific rules against transforming your home into a rental unit. Others may only allow a few homes to operate as rental properties.
Some thoroughly forbid it. So before jumping right in the rental opportunity, it’s best to review HOA rules first.
Check Your Insurance
For a first time landlord, you might not give much thought to replacing your home insurance policy. However, this is a crucial decision. A different type of insurance policy is applicable in a residential property vs. a rental home.
If you fail to update your policy, there could be problems down the road. It could even reach the point where you aren't covered in an unfortunate circumstance.
Don't ignore insurance policy differences when you're taking the initial steps towards becoming a landlord.
Evaluate Your Mortgage
Do you have a mortgage loan for the property you want to transform into a rental property? Check if you’re duly compliant with mortgage loan regulations.
Some banks require a property owner to live in the house for a certain period. Make sure you have fulfilled the conditions.
Property obtained for investment purposes will come with different regulations than property obtained solely for housing.
Be sure to follow mortgage rules before taking on the role of a landlord.
Familiarize Yourself With Landlord Responsibilities
Being a landlord comes with important legal duties. You’re required to make your rental property habitable. You must also adhere to the building safety codes.
A landlord is also expected to respect the implied covenant of quiet enjoyment that tenants have.
Handling property repairs and emergency situations are also part of any landlords’ obligations to their tenants.
Learn Tenant Rights
Landlords are expected to be aware of the rights of tenants. Otherwise, you could end up facing a lawsuit. Some tenant rights include privacy, safety, and a peaceful living environment.
Being up to date on the Federal Fair Housing Act is essential.
Landlords are expected to issue the proper notices prior to entering the rental unit. They must also invest in security measures to prevent tenants from being disturbed.
Study Rental Property Laws
Since you’re handling a rental property, it’s one of your duties to be well versed in property laws. This means learning about how to conduct touchy procedures such as tenant screenings and evictions.
You also need to be familiar with if your state allows non-refundable fees and the required disclosures.
A landlord must also be knowledgeable about security deposit regulations before receiving a deposit from a renter. If a tenant breaks a lease, the landlord must know whether it's legally justified.
Conduct Necessary Repairs
Before welcoming prospects for a property showing, note down where property repairs are needed. If any important appliance isn't working properly, have it fixed. It’s vital to show a rental property in excellent condition.
Double-check your electrical systems, plumbing, and critical units such as heaters and air conditioners. Your rental space must exude habitability at first viewing.
Consider the Foundation
If your rental property is an old structure, it’s a good practice to subject it to a foundation inspection. This reduces your liability as a landlord and also increases your confidence when welcoming tenants.
You want to offer a stable and safe rental home. Small cracks and property damage can lead to expensive costs when connected to poor structural foundation. This is particularly important in places where clay soil is present.
Prevent Pest Infestation
A landlord must treat the possibility of pest infestation as a top priority. If you suspect the presence of termites, bed bugs, rodents and other insects, call an exterminator.
Having this potential issue eliminated will give you peace of mind.
It will also help you retain tenants for the long term. Dealing with pest infestation in a quick, efficient manner assures your tenants that they're well taken care of.
Set the Right Rent Amount
Find out how much rentals cost in your neighborhood with similar features to yours. Learn about the market demand. If the economy is not doing well, it might be a good strategy to offer a low starting rent.
When the economy stabilizes, you can proceed to increasing the rent amount. After all, vacant units equate to incurring maintenance expenses.
Use Networking and Collaboration
Everyone needs a little support, and this is especially true for new landlords. You can enlist the help of real estate agents to find tenants for you. If they’ve found suitable quality renters, you can pay the agents a commission fee.
Starting a rental business requires one to have a pool of prospects. Real estate agents who have been in the industry for a long time have a large network to draw from.
Hire a Property Management Company
New landlords are bound to commit property management mistakes. It’s part of owning a rental business. If you want to start your property rental business right, consider hiring a property manager.
Because not all property management companies can be trusted, conduct ample research.
Look at reviews, interview each company about their services, and check their performance records. This way, you’ll be confident of your choice.
If you need a property manager for your rental home in Fleming Island or Jacksonville, Florida, call Gifford Property Management now at (888) 870-5070.
You can also visit www.giffordpropertymanagement.com to learn more about our services and get in touch.