Renting out property is one of the more popular ways to earn passive income. However, being a landlord still requires hard work and a significant investment of time and money. These three tips will help you be a successful landlord.
1. Understand the Rental Laws
Landlords must have at least a basic understanding of federal and local rental and housing laws, including the Federal Fair Housing Act. You should also pay attention to any habitability laws that apply in the locations where you own property. The Fair Housing Act provides anti-discrimination protections for renters. City and state laws usually govern landlord responsibilities, tenant rights and rental leases. Your local landlord association can be a good resource. You may also want to employ a property manager. If you have access to an experienced real estate mentor, such as Steven Taylor Los Angeles, use that person’s expertise to your advantage. Failing to comply with the law can have severe penalties, so don’t skip this step.
2. Screen Your Tenants
If you have had a unit sitting empty for a while, it may be tempting to rent it out to the first person who applies, but this is not a good idea. Complete a full screening process on every potential tenant that includes a criminal background check, employment and rental history and credit report. Look for red flags that may indicate the tenant will not pay rent, damage your property or be a danger or nuisance to other tenants. Be sure to adhere to the Fair Credit Reporting Act when screening tenants. Establish written screening criteria and stick to them with every applicant. It is expensive and time-consuming to evict tenants who don’t work out. Proper screening can save you a lot of time and money.
3. Protect Yourself
If you hope to someday be as successful as Steven Taylor LA, you need to protect your investment. Make sure your property is properly insured and that you have adequate liability coverage. Local laws may govern what types of insurance you are required to purchase. It is also a good idea to encourage your tenants to purchase rental insurance.
Once you get the hang of it, being a landlord can be a great way to earn a living. However, failing to create a plan is a good way to sink your career as a landlord before it really gets started. These three tips are a good place to start the planning process.