Are you an accidental landlord? An accidental landlord is someone who lived in a house or inherited a house and decided to rent it out without ever planning to be a landlord in the first place. Being a landlord can be a daunting task, especially if you’re new to the game. Many accidental landlords completely misjudge what it is like to manage a rental property or choose the wrong tenants who cost them a lot of money. There are some things accidental landlords can do to make their lives easier and reduce the risk.
Here are 5 accidental landlord tips.
1. Set realistic rent prices
It’s important to set a fair and realistic rent price for your property. Do some research on what similar properties in the area are renting for and set your price accordingly. Overpriced rent can lead to longer vacancy periods, which can cost you more in the long run. You also want to have your pick of tenants, not be stuck with the only one willing to pay your price. Many times the tenants who are willing to pay more for a rental, have other issues like bad credit or evictions on their record.
According to a recent survey by Zillow, the average U.S. rental property is vacant for 25 days before being rented out.
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2. Screen your tenants carefully
A bad tenant can cause all sorts of headaches, from missed rent payments to property damage. It’s crucial to screen your tenants carefully before signing a lease. Run background and credit checks, check references, and verify employment. According to the National Association of Realtors, the most common reason for eviction is non-payment of rent. When I first started as a landlord I relied on my gut to choose tenants. That was not a smart move! I had multiple issues and I realized there are people who are really good at lying and manipulating you.
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3. Don’t skimp on maintenance
Regular maintenance can prevent larger, more expensive repairs down the line. Make sure to stay on top of things like HVAC system maintenance, landscaping, and plumbing. A leaky pipe left unattended can turn into a costly water damage repair. A house in disrepair can also make it harder to rent and attract tenants who you may not want.
In fact, according to HomeAdvisor, the average cost to repair water damage is $2,700.
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4. Familiarize yourself with landlord-tenant laws
Each state has its own set of landlord-tenant laws, and it’s important to familiarize yourself with them. These laws govern everything from security deposits to eviction procedures. Ignorance of the law is not an excuse, so make sure you know your rights and responsibilities as a landlord. The laws are always changing as well. Colorado is trying to implement many changes that will make it much tougher on landlords.
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5. Consider hiring a property management company
If being a landlord is not your full-time job, you might want to consider hiring a property management company to handle the day-to-day tasks of managing your rental property. A property management company can help with tenant screening, maintenance, rent collection, and more.
According to the National Association of Residential Property Managers, the average property management fee is around 10% of the monthly rent.
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Conclusion
Being an accidental landlord doesn’t have to be stressful. In fact, it can dramatically increase your wealth!
By following these 5 expert tips for expert landlords, you can make sure your rental property is a success.
And if you’re looking for even more real estate investment tips, sign up for the InvestFourMore email list. You’ll receive a free book that covers how to build wealth with real estate, as well as numerous other real estate investment tips and exclusive discounts on coaching courses.
