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How to Become a Landlord
If you're a first-time landlord or interested in becoming one, our landlord guide will provide a great resource for all things to consider.
Whether you currently own or are considering purchasing an investment property, becoming a landlord requires time, money and a thorough understanding of laws and best practices. This landlord guide provides tips and advice on how to become a landlord, so you know what to expect before you start managing tenants and property.
Please Note: This guide is for informational purposes only. Replexx will consult and advise to better prepare you for this venture. Landlord-tenant laws change rapidly and may be regulated at the federal, state, and local levels. This resource is not a substitute for the advice we offer as your Real Estate professionals. We will also align you with additional resources such as Legal Counsel and TaxAdvisors.
12 Steps to consider in becoming a Landlord
1. Buy an investment property
Before purchasing an investment property or renting out your primary residence, make sure it has the potential to produce positive cash flow in current market conditions.
Factors to consider:
Many landlords own single-family homes, condos, town houses and multi-unit buildings. The type of property you purchase as your first or ongoing investment will determine the amount you’ll have to finance, budget for repairs and most importantly, the profit and benefits you’ll make. However, the larger the property, the more labor- intensive it may be, your team will be there to support you and show you how to manage costs.
2. Budget for unexpected costs
Decide how much you want to earn for short and long term investment to make the investment property worth your time and effort. Budget out any financial projections for the property and prepare for surprise expenses and missed rental payments. This is especially important for a first-time landlord who may be using equity from another property or savings to purchase an investment property.
Our team at Replexx will assist you in forecasting for this and many other needs.
Common expenses for a rental property:
3. Understand landlord-tenant laws
One of the most important steps to become a landlord is understanding landlord-tenant laws. Please view the resources we provide for you at: https://replexx.com . These landlord requirements are set by states, so they vary across the country. Familiarize yourself with your state’s landlord-tenant laws to prevent unnecessary litigation or extra paperwork.
4. Protect yourself with landlord insurance
Landlord insurance will protect your property from accidents and sudden loss and protect you and your financial assets in the event of a liability claim. If you’re a first-time landlord, check with your insurance agency to see what type of coverage you need — it will likely be different than the coverage required if you lived on the property.
Landlord insurance typically covers:
5. Get your property move-in ready
Your rental needs to be livable, enjoyable but most importantly in good condition ideally. Make sure you fix any known issues and install any upgrades and address any small cosmetic repairs that make the rental more attractive and comfortable to renters.
Here are some tips to prepare your rental property:
6. Determine what will be the highest and best market rent
It’s important to charge a reasonable amount of rent. Set the rent too low and you’ll miss out on potential profit, but too high and you won’t attract renters. Fortunately, figuring out how much rent to charge isn’t too hard. We at Replexx will assist you with detailed rental analysis and reports for your unit. Replexx will make sure to keep you up to date with changing market conditions and advise you as needed. This will assist to be sure you give the appropriate amount of notice for any rent increases.
Make it easy for your tenants to submit payment.
Did you know that 58% of renters say they want to pay their rent online, but only 36% are given that option? Aside from being a preferred option by renters, online rent collection makes it easy to keep track of your rental income — and you can even set up automatic payments. There are various online rental management sites that assist in this and tracking expenses. Replexx will assist you in setting up online payment methods like: Zelle, Venmo, Paypal or direct deposit slips to your bank.
7. Market the rental property
One of the steps to becoming a landlord is marketing the property. You’re responsible for filling vacancies by posting ads, hosting open houses, and using other methods to attract renters. However, since most rental property marketing can be done online, this step is easier than you might think. Having the right property management company will ease much of this process
· Take high resolution pictures of your rental.
· Write an ad that highlights best features and upgrades. And if pets are welcome.
8. Screen prospective tenants
The screening process is where you determine if a renter will be a reliable tenant. You’ll collect rental applications and run credit and background checks on each prospective tenant over the age of 18. As a landlord, you must comply with all applicable fair housing laws throughout this process.
Usually, a property management company will handle all this for you if you choose to have one.
Considering many renters live with others, you should be prepared to review and screen multiple tenants for your property. Rental applications provide you with a renter’s background and history, including:
9. Once you have approved a tenant, prepare the lease agreement
The lease agreement sets terms, rules and expectations for both the tenant and the landlord. It’s important to ensure your lease complies with all applicable laws. Here’s our recommended process for finalizing lease agreements:
10. Maintain the property
Maintaining the property not only keeps your tenants happy, but it ensures you’ll be able to keep renting to future tenants without having to do major upgrades or repairs.
Consider performing these tasks regularly:
11. Stay organized
Managing a rental property can be a lot of work — especially for a first-time landlord. It’s one thing to figure out how to start renting property and another to stay organized and turn a profit.
Here are some tips:
12. Decide if you need to hire a property manager
If you’re looking to avoid many of the issues that landlords must deal with, you can hire a property manager to handle the entire rental process or just a part of it.
If you plan on professional management from the start, you can negotiate your rents to cover the added cost. It will cost you a percentage of the rent — in many cases 8% to 10% — but it could be well worth it. Plus, it’s a deductible expense.
At Replexx, we have advised and supported many property owners on how to manage their own, but most importantly guided them to continue growing their Real Estate Holdings.
**If you are interested in property mangement go to our Property Management section for more information.
How to Become a Landlord
If you're a first-time landlord or interested in becoming one, our landlord guide will provide a great resource for all things to consider.
Whether you currently own or are considering purchasing an investment property, becoming a landlord requires time, money and a thorough understanding of laws and best practices. This landlord guide provides tips and advice on how to become a landlord, so you know what to expect before you start managing tenants and property.
Please Note: This guide is for informational purposes only. Replexx will consult and advise to better prepare you for this venture. Landlord-tenant laws change rapidly and may be regulated at the federal, state, and local levels. This resource is not a substitute for the advice we offer as your Real Estate professionals. We will also align you with additional resources such as Legal Counsel and TaxAdvisors.
12 Steps to consider in becoming a Landlord
1. Buy an investment property
Before purchasing an investment property or renting out your primary residence, make sure it has the potential to produce positive cash flow in current market conditions.
Factors to consider:
Many landlords own single-family homes, condos, town houses and multi-unit buildings. The type of property you purchase as your first or ongoing investment will determine the amount you’ll have to finance, budget for repairs and most importantly, the profit and benefits you’ll make. However, the larger the property, the more labor- intensive it may be, your team will be there to support you and show you how to manage costs.
2. Budget for unexpected costs
Decide how much you want to earn for short and long term investment to make the investment property worth your time and effort. Budget out any financial projections for the property and prepare for surprise expenses and missed rental payments. This is especially important for a first-time landlord who may be using equity from another property or savings to purchase an investment property.
Our team at Replexx will assist you in forecasting for this and many other needs.
Common expenses for a rental property:
3. Understand landlord-tenant laws
One of the most important steps to become a landlord is understanding landlord-tenant laws. Please view the resources we provide for you at: https://replexx.com . These landlord requirements are set by states, so they vary across the country. Familiarize yourself with your state’s landlord-tenant laws to prevent unnecessary litigation or extra paperwork.
4. Protect yourself with landlord insurance
Landlord insurance will protect your property from accidents and sudden loss and protect you and your financial assets in the event of a liability claim. If you’re a first-time landlord, check with your insurance agency to see what type of coverage you need — it will likely be different than the coverage required if you lived on the property.
Landlord insurance typically covers:
5. Get your property move-in ready
Your rental needs to be livable, enjoyable but most importantly in good condition ideally. Make sure you fix any known issues and install any upgrades and address any small cosmetic repairs that make the rental more attractive and comfortable to renters.
Here are some tips to prepare your rental property:
6. Determine what will be the highest and best market rent
It’s important to charge a reasonable amount of rent. Set the rent too low and you’ll miss out on potential profit, but too high and you won’t attract renters. Fortunately, figuring out how much rent to charge isn’t too hard. We at Replexx will assist you with detailed rental analysis and reports for your unit. Replexx will make sure to keep you up to date with changing market conditions and advise you as needed. This will assist to be sure you give the appropriate amount of notice for any rent increases.
Make it easy for your tenants to submit payment.
Did you know that 58% of renters say they want to pay their rent online, but only 36% are given that option? Aside from being a preferred option by renters, online rent collection makes it easy to keep track of your rental income — and you can even set up automatic payments. There are various online rental management sites that assist in this and tracking expenses. Replexx will assist you in setting up online payment methods like: Zelle, Venmo, Paypal or direct deposit slips to your bank.
7. Market the rental property
One of the steps to becoming a landlord is marketing the property. You’re responsible for filling vacancies by posting ads, hosting open houses, and using other methods to attract renters. However, since most rental property marketing can be done online, this step is easier than you might think. Having the right property management company will ease much of this process
· Take high resolution pictures of your rental.
· Write an ad that highlights best features and upgrades. And if pets are welcome.
8. Screen prospective tenants
The screening process is where you determine if a renter will be a reliable tenant. You’ll collect rental applications and run credit and background checks on each prospective tenant over the age of 18. As a landlord, you must comply with all applicable fair housing laws throughout this process.
Usually, a property management company will handle all this for you if you choose to have one.
Considering many renters live with others, you should be prepared to review and screen multiple tenants for your property. Rental applications provide you with a renter’s background and history, including:
9. Once you have approved a tenant, prepare the lease agreement
The lease agreement sets terms, rules and expectations for both the tenant and the landlord. It’s important to ensure your lease complies with all applicable laws. Here’s our recommended process for finalizing lease agreements:
10. Maintain the property
Maintaining the property not only keeps your tenants happy, but it ensures you’ll be able to keep renting to future tenants without having to do major upgrades or repairs.
Consider performing these tasks regularly:
11. Stay organized
Managing a rental property can be a lot of work — especially for a first-time landlord. It’s one thing to figure out how to start renting property and another to stay organized and turn a profit.
Here are some tips:
12. Decide if you need to hire a property manager
If you’re looking to avoid many of the issues that landlords must deal with, you can hire a property manager to handle the entire rental process or just a part of it.
If you plan on professional management from the start, you can negotiate your rents to cover the added cost. It will cost you a percentage of the rent — in many cases 8% to 10% — but it could be well worth it. Plus, it’s a deductible expense.
At Replexx, we have advised and supported many property owners on how to manage their own, but most importantly guided them to continue growing their Real Estate Holdings.
**If you are interested in property mangement go to our Property Management section for more information.
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