Have you just become a landlord? Did someone in your family pass away, or did you buy a second home? Many scenarios can make you a first-time landlord, and the designation may seem daunting.
Luckily, there are many tips and tricks out there to help you succeed at being a landlord. From rental analysis to an emergency fund, here are some tips for navigating the world of property management.
Perform a Rental Analysis
First, you need to figure out what to charge for rent. Factor in elements such as market rate, condition of the house, and location when you decide how much to charge for your rental property.
Ideally, your rental income should be as much or more than your monthly expenses. Calculate the total cost of your mortgage payment, insurance, property taxes, and HOA fees.
Keeping accurate accounting records is important to determine if you need to raise the rent or cut back on expenses. You should do a rental analysis at least once a year, ideally when the time comes for your tenants to renew their lease.
Hire a Property Manager
You may not enjoy being a landlord. If that's the case, property management services are an ideal solution. You can pay to have every element of your property management taken care of by a third party.
Property management companies are full of experienced professionals who can guide you through being a landlord. They will also be able to evaluate your finances and give you advice on how to maximize your profit.
Screen Potential Tenants
Tenant screening is paramount to ensure that your unit is safe, protected, and in good shape. Run a background check on tenant applicants to view things such as:
- Criminal history
- Eviction records
- Credit scores
It can't look for everything, but tenant screening should weed out most of the bad eggs you may find when searching for people to occupy your rental property.
Build an Emergency Fund
Being a landlord can be quite an investment. Even if you bring in a lot of money every month, you should still have some set aside in case of emergency.
Some home repairs can cost thousands or even tens of thousands of dollars. You also need to account for problems that may leave your unit vacant for extended periods, such as roof replacement.
A good rule of thumb is to have one to three percent of your home's value available in liquid cash. Keep it in a high-yield savings account so it's easily accessible.
Excel as a First-Time Landlord
You shouldn't have to worry too much if you are a first-time landlord. With tools like tenant screening and rental analysis, you can find success with renting out properties and building your portfolio.
Sometimes, you need a partner to help you out with landlord rescue. Austin Property Management is the perfect solution in the Buda, TX area.
With our combination of education and experience, we're here to assist you with any of your property management needs. Reach out to us today to get started.
