Essential Tips for First-Time Landlords
So, you finally decided to invest in a property and turn it into an income-generating rental space—congratulations are in order. The first step to succeed in this industry is to find the courage to start.
Now what? You may ask yourself how to handle a rental unit to maximize your returns financially and have long-term tenants.
If you’re managing your rental unit for the first time, you will appreciate the following tips in making your new venture easier to handle:
1. FOCUS ON RENT COLLECTION
Without rent payment, your rental business will vanish. Therefore, concentrating your efforts on collecting the rent is crucial to sustaining your income. When a tenant moves in, the landlord must obtain the first month’s rent, the required security deposit and any pet fees, if applicable.
Most landlords require rent to be due on the first of the month, but often provide a “grace period” before late fees hit. Ensure that your lease documentation clearly outlines the expectations for rental payments and discusses the rent payment channels that are in place.
For example, online payment is generally preferred for its convenience. Make sure the tenant can readily pay through various means so that paying rent is a simple process for your tenants.
Rent payment is the lifeblood of your business, so it makes sense to focus on being able to collect it promptly. As a first-time landlord, there’s no reason to be hesitant when setting expectations for rent payments.
2. ENSURE RENOVATIONS WILL AFFECT RENT
When doing renovation projects, it pays to do a cost-benefit analysis. Will it make an impact on the rent price?
Sometimes landlords can get carried away and over-renovate, not making much difference in terms of increasing rental prices. When you spend too much, you end up waiting a long time to recover from your expenses. You also want to make sure that your renovations make the space inviting to tenants.
Here are upgrades that are beneficial to focus on:
If it looks old, change it since it can make a room look slovenly, even if the rest of the furnishings are new and modern.
FOCUS ON REVAMPING KITCHEN CABINETS
People like functional storage, so repair cabinet handles and doors. Storage spaces in kitchens are always welcome, and they need not be expensive to impress your tenants.
FOR REPAINTING, HIRE A PROFESSIONAL
While it might be tempting to complete a DIY project, sloppy paint will not earn admiration from your tenants. It’s also important to repaint, especially when the paint is peeling, as this will spell out the condition of the property to a prospective tenant.
CHECK FAUCETS, LIGHTS, AND SHOWERS
These are basic things we immediately notice inside a property. They also cost less to replace.
These upgrades are not only low cost, but they make a lot of difference. Who wants leaky faucets, dim lights and moldy shower sprays?
BATHROOM, KITCHEN, AND BEDROOMS
These 3 spaces are the major areas of the house where renters love to see upgrades. It’s best to concentrate your efforts on improving these particular places than the other parts of the property.
3. EFFECTIVE MARKETING STRATEGY
Nowadays, online is the best place to market since most people buy and conduct their research there. Use social media platforms. You can also gain more exposure through the following:
INTERNET LISTING SITES
Check for popular websites, such as Zillow and Hotpads, to capture interested prospects.
Visibility is easier when millions flock to these sites to search for property rentals in their area. Create profiles for free and upload topnotch images.
This is another free site where more specific matches are made since they incorporate location searches. This means a prospect and a landlord can easily find one another. The reach is broad but well-targeted.
Facebook’s user numbers speak for themselves as an effective platform to market your property. You can boost posts and use retargeting techniques. Social media marketing is also relatively easy, and you can switch property photos frequently compared to other sites.
Video marketing is becoming popular these days, so you can take advantage of this. You can conveniently upload virtual property walkthroughs using your mobile phone.
People want to check out virtual tours to save time and have a prior idea before requesting a property showing. You can also attach your video on other social media platforms, thus expanding your potential client base.
Build an email list generated from your website visitors. This puts you in immediate contact with prospective customers. Find ways to reengage them. They might even refer a friend who’s looking for a specific property located in your area.
4. SCREEN TENANTS PROPERLY
Detailed and well documented tenant screening procedures are critical to ensuring you adhere to fair housing laws while building a community of qualified residents. It pays to conduct due diligence by assessing a tenant’s financial capacity and sense of responsibility. You can check out credit reports, bankruptcy or eviction records, and employment documents such as pay stubs, tax forms or an employment acceptance letter.
Even if initially being a new landlord makes you excited about inquiries from prospects, it’s essential to follow a critical evaluation process. Otherwise, when a renter fails to pay his rental dues, your income is affected. Peruse the documents and double-check them and employ a third party to help with screenings to ensure and fair screening process for all prospective residents.
It can be time-consuming to deal with frequent evictions. Finding quality tenants, placing them in a home where they meet the qualifications and rental obligations, and keeping them there for a long time is the ultimate goal, afterall.
When you’re a first-time landlord, you may worry about making mistakes. That’s quite understandable since it’s all part of the experience of managing a rental unit. As long as you’re armed with the knowledge of implementing the best practices, you can spare yourself from costly mistakes.
If you wish to have professional property management support, contact Alltrade Property Management at (502) 562 1985 or email . You can also find more information at alltradeproperties.com.