7 TIPS ON BEING A SUCCESSFUL LANDLORD
As a landlord or real estate owner, your first and only priority is renting out your property and making money right! Many people are attracted to the idea of making money from the properties they own, but not many people actually do make money from their properties.
This is due to a variety of reasons, from lack of real estate secrets to bad marketing skills.
To help you as a landlord, here are 7 tips you should know before renting out your house as an investment property.
1. Demand for accommodation: The first and most important factor among the things to know before renting out a house is the demand for accommodation (real estate) investing in your location. This is crucial to know because as a landlord, your goal of renting out your investment property is to make money, and your main source of income would be the rent collected from tenants renting your income property. If demand is low for accommodation (real estate) in your area, then you’re going to have a hard time finding tenants for your income property in the first place. In addition, even if you do manage to find a tenant, the rental income and the rate of return on investment in locations with low demand are not as high as property investors would want them to be.
2. Is your House RENTABLE: Put yourself in the shoes of your-would be tenant, is your property rentable? Would you live in your house if the tables were turned?
Just because you decide to put your home on the real estate market as a rental property, it doesn’t mean that someone will rent it right away. Therefore, number two among the things to know before renting out a house and becoming a landlord is whether or not your home is actually rentable. This basically means whether your home is appealing as a rental property. To determine the answer, conduct a real estate market analysis to have a look at rental properties in your area and find out what features make an income property attractive and appealing to tenants. To succeed as a real estate investor, you’ll have to conduct a few repairs to your home in order for it to pass as a rental property which you can rent out and make money out of.
3. Know the Law : Among the things to know before renting out a house in this regard are the tenancy agreement to inspections, rent collection, terminations, and a basic understanding of the Residential Tenancy Act. This will ensure property investors that they’re acting in a legally compliant manner. Other things to know before renting out a house are federal, state, and local housing laws in your area, and what your rights and obligations as a real estate investor are.
4. The costs : Just because you’re renting out your home, don’t assume that you’ll be earning a whole lot of spare money to save. One of the things to know before renting out a house as an investment property is that turning a house into an income property comes with costs that you, as a real estate investor, have to keep in mind. Property management, advertising, maintenance, capital gains tax, and insurance are among the things to know before renting out a house as a landlord. As mentioned before, conducting a real estate market analysis will help in this regard. This will allow property investors to estimate the costs of real estate investing in their local real estate market. Moreover, among the things to know before renting out a house is how much to charge for rent. Knowing the rental rate in your local real estate market will help you set your rent. Try to calculate all associated costs and set your rent to determine how turning your home into a rental property will affect your budget and lifestyle and whether this move is worth the effort.
5. Property Management : The next on the list of things to know before renting out a house as an investment property is that one key to a successful real estate investing career is property management. Managing a real estate investment property requires time, effort, organization, and attention to details. So, before turning your house into an income property and becoming a landlord, ask yourself this: Am I ready and capable of managing a rental property? A well-managed property will always attract people. Especially in Nigeria where good houses are hard to come by. If you can’t manage the property yourself, hire a property management company who can. A professional property management company will take care of all aspects related to your rental property for a fee. Services provided by a professional property management company include finding a tenant, advertising the investment property, collecting monthly rent, handling repairs, and maintaining the income property, in addition to taking care of evictions.
6. Finding Tenants: As mentioned, the main source of income when you turn your home into an investment property is the rental income collected from tenants. Thus, without tenants, property investors will lose their rental income. This is why one of the things to know before renting out a house as an income property is how are you going to find tenants. Generally, renting to family and friends is not advisable. Some of the best ways to advertise your income property include local newspapers and online websites like www.renting.ng.
Other things to know before renting out a house is learning how to select a good tenant. It is always difficult doing that, but you can always find the best tenants on www.renting.ng.
Never rent out your home to just anyone who fills out an application form. As a real estate investor, you need to thoroughly review the application, do background checks (like credit reports and criminal history), and contact references (like employers and previous landlords). No real estate investor wants to end up with a tenant who causes damage to their income property and does not pay rent. The tenant screening process is among the most important things to know before renting out a house and becoming a landlord.
7. Writing a Lease: The last on the list of things to know before renting out a house as an investment property is knowing how to write a lease agreement. Always avoid handshake deals! A written lease will ensure that both you, as a landlord, and your tenant understand your rights and obligations. A good lease complies with fair housing as well as rental, tenant, and insurance laws in your local real estate market. As these laws differ across the Nigeria, it’s best for you to work with a local real estate lawyer. Lease templates from the Internet may not comply with the laws of specific areas. In general, among the things to know before renting out a house in this regard is that a lease will typically include the following:
These are the most important things to know before renting out a house as an investment property and becoming a landlord. Make sure you take them seriously in order to successfully turn your home into a rental property and start making money…