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Congratulations on making the leap towards owning an investment property!
Property investments are often seen as one of the most reliable (and profitable) way to create wealth and opportunities due to tax benefits and passive income potential.
But as all investments it takes time and effort to look after and monitor a single property.
And becoming a property investor generally means becoming a landlord.
Making the decision to becoming a landlord for the first time can be quite daunting for some. There may be a variety of reasons why someone would choose to take on the responsibilities of doing so but one thing that’s certain is that anyone can become a landlord.
For instance, you could be a homeowner who has bought a property but not ready to let go of a previous property and so you rent it out for convenience; you may be an individual looking to get some extra income to cover bills or you could be investor seeking to make money and become wealthy.
So here are some few tips and tricks for first-time landlords.
Write a checklist
It sounds simple and obvious (and it is), but many first time landlords tend to overlook some of the simple tasks. It is important to keep track of what you need to do when a tenant moves in and resides at your property. These may include background checks, carpet cleaning, furniture repairs and lock changes. Making a list once will save you lots of time and effort, in the future.
Do your homework and calculate the costs
Don’t meant to sound like your mother here but you need to do your homework! Like everything in life, research will be fundamental to your success as a landlord. Without a proper understanding of all costs involved, you will lose track of how much to charge for rent and make a profit. There are a number of costs to factor in, such as:
- Insurance costs: This is be likely to be on of the biggest upfront costs for a landlord.
- Mortgage costs: If you have mortgages to pay on a property, its best to take into account of that as well when setting up a rent price.
- Repair costs: As a landlord, you will be responsible for fixing anything that breaks in the rental unit — either on your own or by hiring a tradie.
By calculating your expected costs, you can determine how much of the rent you can expect to keep, and how much you will need to set aside for upkeep of your rental property.
Have a personalised written rental agreement
Having a written rental agreement is the best way to communicate your expectations and protect yourself in legal situations. Oral agreements are not sufficient and are less effective than a written document signed by both parties. It’s difficult to prove what was agreed upon without a written document.
A useful rental agreement is also specific. You should think through what rules you want to include. Are pets allowed? Do you want a noise restriction rule? Make sure your rental agreement is customized for you.
Having a rental agreement that is specific to your rules makes communication with your tenant easier. If everything is mapped out in the rental agreement, there will be less confusion and confrontation down the road.
Keep digital records of EVERYTHING
When I say everything I mean EVERYTHING.
As a landlord, you should keep records of everything: deposit receipts, rent receipts, maintenance receipts, and a record of all landlord-tenant communication. Digital records can be securely organized without creating paper clutter.
Holding onto receipts and communication records is a good idea in case legal issues emerge. If you have records of transactions and communications, then you are more likely to prove you’re right in court. Having evidence to support your claims is always a good idea.
Keeping records is how you professionally manage your business. Storing them digitally is the most organized, up-to-date way to do it.
From managing your rental property business, finding and screening tenants, and collecting rent, every step along the way matters. We want you to manage a top-notch rental business without sacrificing unnecessary amounts of time, money, and stress. With the right advice and landlord tools, being a landlord doesn’t have to be hard.
This is a lot to learn and can be very difficult to manage and keep track of everything. Especially for a self-managing landlord or property investor new to the property game.
To help you with all of these daunting and overwhelming task is Kitt.
Come check out what Kitt all about and get your free trial today!