If you’re considering investing in rental properties, it can be overwhelming to know where to start. Maybe closing the deal is the easy part — but after that, what comes next?
How do you know what to look for in a tenant? What about rent? Or maintenance? Or evictions?
All these questions might be swimming in your head and it can be hard to know where to start. Fortunately, this short guide will help you get the basics nailed down so that after you close on that rental property, you can quickly get a tenant in & start collecting rent!
- Set Minimum Requirements & Check Landlord References
It’s important to ensure you find high-quality tenants that will pay you rent on time and take care of your property investment.
There are two things you should factor into your application process that will help you save time while looking for the ideal renter: minimum requirements and landlord references.
Most landlords set up minimum requirements (such as credit score and income earnings) that let them quickly determine if a tenant is qualified for their property. This helps you save time when screening tenants so that you don’t have to worry about showing your property to someone who isn’t qualified.
Additionally, taking precautions like background checks and checking landlord reference letters will go a long way to ensuring that you secure a great tenant! Landlord reference letters are great ways to create a full picture of how a tenant will act once they’ve signed the lease.
2. Set Up An Easy Method of Rent Collection
Speaking of rent, setting up a rent collection system that works for both you and your tenants is a critical function of the renting process. While this may seem obvious, sometimes you’re just so focused on nailing down on all the details of securing an investment property, you forget to research the best way to collect rent for that property!
While there are several methods of collecting rent you can use (like checks, cash, money orders, and via a mobile app), what’s key is to adopt an online organization system that lets you record and track all of your rent payments in one place. Property management software like RentRedi is ideal for an affordable way to manage all your properties—from listing to collecting rent—while staying organized.
3. Regularly Inspect Your Property—Even If You Have A Great Tenant
It’s important, even after you find an awesome tenant, to ensure that they are taking care of your property and that you know what’s going on. This is why it’s generally recommended that landlords conduct routine inspections every quarter or 6 months so that you are aware of any damages or wear-and-tear on the property.
It is very easy to find rental inspection checklists that will let you keep track of the condition of the property consistently so your investment is always protected and your property remains livable and in good condition.
4. Know The Eviction Laws In Your State
No landlord wants to evict a tenant, but unfortunately, sometimes it does happen for various reasons.
This is why you need to be well-versed in the eviction process in your state and follow every rule to the letter. While the overall process varies from state-to-state, in general, you will need to write an eviction notice to give the tenant the proper time to move out.
After proper notice, if the tenant refuses to vacate, you can usually pursue legal recourse. However, bear in mind that eviction proceedings can be long and arduous. Sometimes, the process can be drawn out for months.
This is why it’s always important to keep reserves (financial savings dedicated solely to covering a rental property’s monthly rent) in the event of a longstanding vacancy or eviction process wherein you cannot actively collect rent on the rental.
When you first get started in looking to invest in rental properties, make sure you think beyond just securing the deal. After all, once that property is yours, then comes the mortgage payments & taxes!
Not only is finding a great tenant important for rental properties but so is collecting rent, maintaining the rental & protecting your investment, and knowing what landlord-tenant laws you need to follow to ensure you’re running your business properly to avoid any legal issues!