Investing in rental properties can be a great way to accrue wealth, generate income over time, or increase cash flow. However, especially for first time landlords, the process can be overwhelming. Choice Properties has experienced staff specialized in assistance and management services to serve as your best partner in this process. We manage every property as though it is our own, and help you to persevere through any obstacles. Keeping with our client-first philosophy we have curated a list of five tips to make the process as smooth as possible.
Step #1: Find a Property
When first becoming a landlord, it is important to figure out which type of investment property will work best for you. Residential properties such as condos or single-family homes are the most common, but commercial properties such as retail spaces can also be lucrative. Determine which route works best with your style of management and go from there. It is also important to scope out the property before investing to understand if it is in a profitable location, is up to code, if it will need any renovations, and others.
Step #2: Understand the numbers
Before becoming a landlord, you need to know the financial basics as there are several factors that go into renting out a property. It is important to consider how much profit you expect the investment to make, and base your calculations on this number. Factors to consider in determining whether your rental property will be profitable or not are things such as insurance rates, taxes, costs of maintenance, costs related to the HOA, and occupancy rates.
Step #3: Stay Organized
Being a landlord is a hectic job, so to make things easier in the long run it is important to stay organized. This looks like staying up to date on local, state, and federal property laws. Vetting a neighborhood, collecting payments online, making sure important financial documents are backed up, or budgeting for unexpected costs.
Step #4: Create a screening process for tenants
It is important to create the most effective screening process to make sure you can sort out potential disruptive or difficult tenants. This can look like requiring a rental application, renters insurance, or a credit and background check. You should also make sure to thoroughly think through your rental agreement or lease. Will pets be allowed? When should payments be made? Rules regarding property damage, etc. Making your lease as clear and specific as possible will lead to a strong landlord-tenant relationship.
Step #5 Consider a Property Manager
A property management company can help alleviate stress if being a landlord becomes too daunting, or if you don’t live near the property. Property management companies work as a third-party to ensure a hassle-free and professional experience. They find the right tenants, foster a landlord-tenant relationship free of conflict, and are quick and efficient. They are experienced in setting the right rental rate for the property, knowing how to effectively market. Lastly, management companies have expertise on the law and keep up with the latest regulations all while maximizing profitability. If you do decide to work with a property management company, please contact us.
Have any questions about renting out a home? Let us handle the burden and contact Choice Property for available and accessible professionals who specialize in commercial and residential leasing. We are small enough to customize the process and really get to know you and your needs, but as the largest commercial property management servicer in the region, we also have the experience and bandwidth necessary to help.