Becoming a landlord is a positive endeavor for many individuals, as it can prove a nice way to bring in extra income throughout the year. Whether you are looking to simply rent out an extra property you own or you are just starting out with a full apartment building under your belt, there are a few specifics you need to know in order to become a landlord and avoid bad tenants. Renting out your property revolves greatly around the quality of your tenants, as a bad tenant becomes much more than just a bad headache but a financial liability as well.
Becoming a Landlord
After you have the property you wish to rent out all fixed up and ready to be shown, you need to make sure you have all the necessary rental licenses obtained through your local city ordinance. Every city is going to have different requirements for rentals. You have to pay a certain amount for a rental license, generally per property, and then you need the location inspected, to make sure it is suitable for a renter. From there, the house or facility is licensed for a set number of individuals. Once you have everything on the up and up with your local government though, you are able to start the search for a suitable tenant.
Locating a Renter
First, you need to determine how much rent you should charge. There are a few different methods for determining this. You can check out what other landlords are renting spaces for in the given area, or you can bring in an inspector and they can go over the entire area and determine what is a fair asking price. You do have to pay for the inspector, but they can help in determining the value, based on location and the services you provide. While trying to deterring the price though, you might initially feel a bit antsy if the property isn’t rented right away. There are high seasons and low seasons for new renters, but you don’t want to reduce the rent to the point where it is far less than what the local asking price is. A lower rent is not only going to increase the number of people applying for the apartment, but it increases your chances of an undesirable individual claiming the apartment.
There are different screenings you need to make with an applicant. For starters, you want to make sure they make enough money to pay for their rent. Typically, you want to them make at least three times more than what their monthly rent is. From there, you want to perform background checks on their previous renting history. This brings up any sort of evictions or other problems previous renters have had.
After you have found someone who is able to make all the necessary payments and who past the background check, you need to have everything clearly in writing, ranging from reason to evict the individual to your pet rules. If it isn’t in writing, it is difficult for you to prove anything in court, should it ever come to that (hopefully it doesn’t). Also, with the security deposit, it is common to request one full-month’s rent for the security deposit. It is important to ask for more than you need, because if the tenant causes more damage than the security deposit, you likely never will receive the other money requires.
Fix on Time
When your tenant has a reasonable issue with their rental, make sure to fix everything in a timely manor. This ensure the very best tenant-landlord relationship.