10 Tips for Landlords
Managing real estate is not an easy task. There can be great financial gains that can be made, but those rewards don’t come easy and without risk. Here are some tips you can follow as a Real Estate investor or Landlord that can you use to maximize your investment and limit risk.
1. Make Rent the Priority
Rent is your revenue. It’s amazing how many landlords are not aggressive in pursuing rent and late charges. It’s sometimes a good idea to work with people who generally need help … if they communicate with you.
But if your tenants just stop paying rent and ignoring your calls or texts, you need to start eviction proceedings. Otherwise, you could be six months behind on rent before you know it, which makes this probably the most important of all the landlord tips.
2. Partner with The Right Investor
You want to because that whoever you choose for your investor, is someone you can fully trust and that they are honest and transparent. Most people will simply choose the investor who presents the best deal, which is also important, but integrity is much more valuable. Make sure that you get multiple referral on your investor and check with some other people he has investments with to see how their dealings have gone in the past before making a final decision.
3. Screen Tenants Properly
Screening tenants is very important. You want to ensure that your tenants have good credit, and can produce evidence of past on time rent payments.
Here is a breakdown of how credit is rated:
Excellent credit — 750 and above
Good credit — 700 to 749
Fair credit — 650 to 699
Poor credit — 600 to 649
Bad credit — anything below 600
You would want to rent to anyone with a minimum of a 650 credit score.
4. Don’t Ignore Extra Income Opportunities
Most landlords think 1-1. What do I mean by that? If somebody buys a house, they simply rent the house out and that’s it. But that method means you could be ignoring several extra income ideas that could improve your property’s return on investment. Some other sources of rental income from a property are:
- Installing Solar Panels to sell back any excess energy generated to the grid.
- Depending on the properly type, you could install a billboard and/or cell phone tower
- You can charge your tenants for use of on property parking
- Rent for use of an empty garage
5. Don’t Invest in Renovations That Won’t Produce Higher Rent
If you are purchasing a property that is in an B+ neighborhood and are looking to renovate it to make it suitable for a rental properly, you want to make sure that you are smart about the renovations. For example, you wouldn’t want to install A+ feature such a crown molding, expensive tiles and counter tops, in a home that is in B+ neighbor. You will absolutely be able to rent or flip the house faster, but you likely will not be able to recover your investment of the more expensive feature you installed as part of the renovation. Renovate smart, don’t over renovate.
6. Know Fair Housing Laws
For some reason, many investors choose not to educate themselves on fair housing laws, and there can be serious implications if you violate them. There’s no excuse to not educating yourself on the laws in the real estate industry. It’s best to talk to a local realtor and even better, a local real estate attorney who knows the local real estate laws.
7. Collect Rent Online
There is no reason for you to be collecting rent by a check in the mail. Not only is it time-consuming to go to your P.O. Box or mailbox, keep up with all the checks, and then deposit the checks, but it’s riskier.The check can bounce, and then you’ll need to pay a non-sufficient funds fee and then contact your tenant for the rent and the NSF fee.
8. Use the Right Financing Strategy
A good deal with the wrong financing strategy is a bad deal. Given the historically low interest rates we are seeing in the U.S., most investors focus on the interest rate, but there’s a lot more to consider when financing rental property. Is there a balloon payment? How long is the amortization period? Can there be an interest-only period when renovating the property? Can we have a line of credit instead of a term loan? Investors focus 99% of their time finding deals. When they get a deal, they then scramble to find financing. Be just as proactive about financing rental property as you are about finding deals.
9. Market Rental Properties Effectively
It’s amazing to me how many real estate investors still advertise in the newspaper and use yard signs. Experience shows that potential tenants who call you about a renting your property, pretend to be interested in your property, are just nosy neighbors.
Utilizing a reputable local realtor or real estate management company can yield the best results in getting your properly rent as quickly and efficiently as possible.
10. BE ORGANIZED!
Keep records of your properties expenses, revenue, tenant contact information, financial information all organized by properly. This will help you gather information on a properly without having to scramble at a moment’s notice, and most importantly, allow you to accurately track and see how profitable your property is.
We hope that these tips have provided you with some valuable information. Our teams of Real Estate Management professions are here to help you manage your properties. Please click here to speak with one of our Real Estate Management professions about your current real estate portfolio and how USA Real Estate Management can help you manage your investments.