If you’re thinking of becoming a landlord, there are a few key practices you’ll need to become second nature in order to make your investment profitable. They are:
- Have an understanding of your local rental laws.
- Make a maintenance plan.
- Get proper insurance.
- Have a background check provider.
- Have a thorough, researched rental agreement.
Understand Local Laws
If you don’t have easy access to an expert on your local rental laws, community resources, such as libraries and your city’s government website are great places to start. You simply need to educate yourself on the rules and regulations on renting out your home, basement apartment, or even a room in order to protect yourself from future liability.
Make a Maintenance Plan
As the property owner/manager, you will be responsible for keeping the property and its appliances in working order. Expect to have a lot on your plate. There’s electrical, gas, water, HVAC, appliances, and anything else agreed to in the rental agreement that you need to worry about. Are you personally a plumber or do you have a fair contractor on speed dial? It’s important to have a list of contacts ready for any eventuality, especially if you’re not qualified to perform a specific type of maintenance yourself.
Get Proper Insurance
Talk to insurance agents to get the best recommendations on property insurance and home warranties. You need a way to protect yourself and pay those contractors on your maintenance list if the worst happens, whether freak accidents, careless tenants, or simple wear and tear take a toll on your property.
Have a Background Check Provider
Find a background check provider that is fair and thorough. Running a background check on prospective tenants is an important step in the tenant screening process. Don’t take a gamble on who you decide to trust with your valuable investment property.
Have a Good Rental Agreement
Consult with an experienced landlord or your legal advisor when drawing up a solid rental agreement. Start with a basic agreement that you like and read through every line to make sure that your interests are protected. It should outline your tenants’ responsibilities as well as your own and be a source of protection for both of you going forward.
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