Renting your townhome for the first time is a big step. So, where do you start? The following five things should be considered carefully before proceeding with process of becoming a landlord for the first time. But, before you start on these five steps, be sure to procure your landlord insurance policy from Insurance by Castle. Call them today at 800•644•6443.
Learn How to be a Landlord
When you rent your home out, you automatically become a landlord. Therefore, it greatly behooves you to know how. Speak to other landlords about their personal experiences. You will learn the responsibility that goes with being a landlord is far more than finding a tenant and collecting monthly checks. You may actually find that rental property can become an almost daily concern.
For example, perhaps there is a high pitched noise coming from the air conditioning unit. It’s not huge, and you just learned to [mostly] ignore it while you lived there. However, when your tenant complains about the same noise, you seemingly have to drop everything and address the issue. This is when having a competent, reliable handyman is a good idea.
Budget for Two
Chances are you are renting the home you just moved out of for whatever reason, and suddenly find yourself the owner of not just one, but two properties. While ideally the rent will cover all the mortgage, insurance, assessment and other costs involved with the rental property, you must still be prepared for the time you will be searching for the ideal tenant, and the property sits dormant, doing little more than accruing expense.
Research Your Tenants
While listing your townhome on CraigsList and other bulletin boards is a good way to put you in touch with prospective tenants, it can also harbor some hidden dangers. For example, you just never know who you are dealing with when you meet someone for the first time.
Do some research and find out what the best options for advertising a rental in your area are. As an extra precaution, there is a plethora of services you can use such as the American Apartment Owners Association (AAOA); they can help you weed out the less desirable candidates. Once you’ve chosen your prospective tenant, a credit and background check are always a must do.
Be Aware- There Are Plenty of Potential Renter Problems to Deal With
Chances are, you’ve heard the horror stories other landlords have to tell. Everything from tenants who (for whatever reason) simply stop paying their rent to renters who maliciously and intentionally destroy your property. Any one of these situations could cost you thousands of dollars.
It also behooves you to consult a property lawyer as there are many laws in place to protect both tenants and landlords. However, these laws vary greatly from one municipality to the next. It is important to understand the laws, and your rights as they apply to your specific area.
Protect Yourself and Your Tenants
Finally, insist your tenant procure a renter’s insurance policy. This will ensure they are covered in the event of an emergency.
Before deciding to become a landlord, weigh all your options and all the pros and cons. Make sure owning more than one property is right for you, your lifestyle, your financial state, and your future.