Published November 2021. Updated June 22, 2023.
Being a landlord can be very rewarding! However, it's not without plenty of challenges.
Many investors say that the biggest challenge is the financial responsibility of being a landlord. However, many responsibilities must work together to avoid losing money on investment properties.
Today, our Newport News property management experts provide our best tips on what you need to know about becoming a landlord and how to avoid some common pitfalls that new rental property owners may encounter when they first get started. We hope you find this guide helpful!
If you are interested in operating rental properties, there are some things you should consider before making the final decision to buy a property or sign any contracts:
Do I have enough funds to invest in a property? Before closing on an investment home, make sure you have the funds, whether it's cash, financing, or a combination of the two. Real estate investors should have enough funds available to invest in a property without jeopardizing their financial situation.
Do I have time to manage a rental property? If you don't think you have the time to self-manage, that doesn't mean you can't be a landlord! Partnering with a property management company is your best resource.
Before becoming a landlord, make sure that you are ready and willing to put in the work necessary for success, or choose property managers to handle everything for you. Answering these questions is a good start!
When buying a rental property, you become a landlord! If you choose self-management, educate yourself about critical tasks that must support your success. Here are a few areas to learn about.
A residential lease agreement serves as the cornerstone of establishing a healthy landlord-tenant relationship. It acts as a legally binding contract that sets the terms and conditions of the rental.
While you may not be a legal expert, it's critical to familiarize yourself with the landlord-tenant laws applicable in your jurisdiction before you begin drafting your lease. This ensures that both you and your tenant are protected under the law.
However, if you're not comfortable creating a lease document yourself, you don't have to go it alone. Hiring an experienced property management professional or an attorney specializing in real estate law can provide invaluable guidance. These experts can help tailor the agreement to your specific needs, ensuring it is comprehensive and compliant with local, state, and federal regulations.
For those looking to save on costs, free lease agreement templates are available online. However, these templates should be used cautiously. Always have a residential property manager review and customize the template to make sure it suits your unique requirements for each rental property in your portfolio and is legally sound.
Comprehensive tenant screening is an essential practice that landlords should not overlook for maintaining a hassle-free living environment. By thoroughly evaluating potential renters, you reduce the risk of future issues like late payments or violation of lease terms.
Various screening methods are available to assess the reliability of applicants. These include running credit checks to gauge financial stability, verifying employment history to confirm a consistent income, and even checking previous rental records.
Your goal as an investor is to secure tenants who can pay rent punctually every month and understand and are willing to adhere to their responsibilities as laid out in the lease agreement. A thorough screening process helps protect property owners and their properties from bad tenants.
After crafting professional lease agreements and establishing thorough tenant screening procedures, the next step is effective advertising of your rental vacancies.
To make the most impact, it's highly advisable to collaborate with a property manager well-versed in the Newport News rental market, like the Osprey Property Management team. Our professionals can provide invaluable insights into the types of properties currently in high demand, helping you tailor your listing to attract the right audience.
The right property management companies can also advise on optimal pricing and marketing channels, whether it's local classifieds or specialized online platforms, to ensure your property reaches potential quality tenants quickly.
By combining your well-structured leasing process with market-specific advertising, you significantly improve your chances of filling vacancies with tenants who are a good fit.
Property owners must take steps at the start of every tenancy to maintain control over any issues that might arise between them and their tenants. The solid lease agreement we mentioned earlier is a crucial first step!
Throughout the lease term, property owners must then enforce the lease consistently. Enforcement can range from conducting simple property inspections every month to check on tenant behavior and the property's condition to executing formal notices based on a tenant's lease violation. Forms of notice include a notice to pay rent, a notice to comply or quit, and a notice to vacate.
Eviction is a legal process that should always be done with the help of an experienced professional. If you're in a situation where a renter needs to be removed from a rental property, consult your lawyer and a property manager to follow the process for the best outcome.
Maintaining your property in optimal condition is not just about aesthetics; it's a long-term investment that can save you money and headaches in the future.
Regular inspections are crucial to identifying minor issues before they escalate into costly repairs. Your lease agreement should clearly specify the maintenance responsibilities for you and your tenant, delineating who is responsible for what.
However, it's crucial to remember that the ultimate responsibility for timely and adequate repairs rests with the property owner. Whether it's a leaking faucet or a malfunctioning HVAC system, timely action is essential.
Postponing repairs can not only exacerbate the problem but also sour the landlord-tenant relationship and potentially violate local housing codes. Employing a reliable maintenance crew or rental property maintenance services ensures that repairs are done promptly and up to code, thereby safeguarding your investment and maintaining a positive, professional relationship with your tenants.
It's important to prepare your property for new tenants when one moves out and before new renters move in. You can hire a professional cleaning service or simply do it yourself before renting your property again.
However, conducting a thorough make-ready process to clean and repair a property is essential, then help renters move in with a helpful move-in checklist!
Before buying your first rental property, it's vital to have a strong understanding of landlord-tenant laws at the local, state, and federal levels. Regulations can differ significantly by location, affecting everything from eviction procedures to rent control.
Stay current on legal changes by regularly consulting local governing agencies, real estate websites, and your attorney to ensure you're in full compliance. Additionally, hiring a knowledgeable and professional property manager can be an excellent asset in this regard. They not only help in the day-to-day management but can also keep you informed about legal requirements and changes in legislation and help ensure that you meet all legal obligations.
Being well-informed and compliant reduces your liability and makes your venture into property ownership smoother and more profitable.
Effective property management is all about preparation and foresight, equipping yourself to handle both planned and unplanned events.
As a property owner, it's crucial to budget for routine maintenance and repairs that will inevitably arise due to wear and tear. However, our professional property managers recommend doing more! Maintaining a reserve fund for emergencies is equally important.
Whether it's a burst pipe, a sudden HVAC failure, or unforeseen damages from a natural disaster, emergencies can crop up without warning. Having a dedicated reserve fund ensures that you can address these issues promptly without jeopardizing your financial stability or the condition of your property.
Being financially prepared for the unexpected makes you a more resilient and effective property manager.
Being the best landlord in Newport News takes a lot of work! From making sure your property is in good condition and up to code to finding tenants who will pay their rent reliably, a property owner has a lot on their plate.
If this sounds like too much work or you don't know how to handle it all yourself, Osprey Property Management is here to help with everything from tenant screening services to property marketing, rental maintenance, rent collection, and more! We make managing rentals easy (and more profitable for investors) by handling everything for you.
Reach out today to learn more about our property management services!
Get more insights into managing rental properties. Download a free copy of the "Expert Guide to Rental Property Management."