So you’re entering the real estate business, huh? Nice! Real estate is lucrative, and, let’s be honest, it feels good to be able to wield full control over an entire building. But there’s also a sentimental quality to being a landlord. You’re able to positively affect the lives of the people you’re renting to by providing them with a place to live and make memories.
Excited yet? You should be. Just know that renting out a property is not a walk in the park. There’s a lot of things you’ll have to manage from beginning to end, and you could wind up losing money if you don’t properly manage it all. Here are a few pieces of landlord know-how that you should study up on before you rent out your first apartment.
Listings and Viewings
To get your apartment rented out, you’ll have to make it known to prospective tenants that the apartment is available for renting. Real estate marketing is an obvious, but often-overlooked step in the process.
Create rental listings that advertise the apartment. The Internet makes this easy. There are plenty of apartment listing websites where you can promote your available property. But don’t forget about other advertising avenues. Placing “for rent” signs around the neighborhood is an incredibly effective way to lure tenants. Place the sign in vacant windows at the apartment complex, and place them at street corners or on telephone poles (so long as your city permits that).
When you create your listing, make sure to include all of the apartment’s specs: number of bedrooms and baths, square footage, parking availability, etc. Talk up any unique features about the place, like architecture or special amenities like a pool, balcony, or great views. But, whatever you do, don’t include any false information on your listing. If there are negative aspects about the apartment, just don’t list them. As they say, “if you don’t have anything nice to say, say nothing at all.”
After you’ve made your apartment listing, you’ll probably get requests from prospective tenants to come view the apartment. They want to see how it looks in person and whether or not there are any qualities about the place that are deal breakers. Be accommodating when you’re showing the house. Clean the place beforehand, but don’t try and lock up any rooms or hide any deficiencies that the tenants would easily notice when they move in. Remember that many people work from 9 to 5, so try and make yourself available to give viewings after work hours.
Background and Credit Checks
After you give viewings of the apartment, you’ll hopefully have prospective tenants who are sold on the place and who would like to sign a lease. The listing and viewing process is sure to be exhausting, but don’t be too anxious to rent out to just anyone. Always run background and credit checks on prospective tenants before you offer them a lease.
A landlord background check is when you gather information on the prospective tenant’s legal history. You’re looking to see whether or not they’ve been convicted of any crimes. If they have, you might not want to offer them a lease. It all depends on how you feel about the crime they committed, and whether or not you think they’d repeat the offence while living at your property. Remember that future tenants may not want to live in the same apartment complex as a convicted criminal.
A landlord credit check is when you gather information on the credit history of prospective tenants. Credit history is revealing. If a tenant has a bad credit history, it could mean that they have not paid their bills or debt in a timely manner—which could suggest that they won’t pay rent in a timely manner either. But someone with a bad credit history isn’t automatically a bad tenant. If a tenant’s background or credit check is less than stellar, you can always ask the tenants some more insightful questions about their prior legal or financial history.
Remember that prospective tenants must give you permission to run background checks and credit checks. Likewise, you don’t have to offer a lease to someone who refuses to let you run those checks.
Maintenance Requests
So the background and credit checks revealed nothing alarming about your prospective tenants, and they’ve signed a lease and moved into the apartment. That means your work is done, right? Wrong. You’re not officially a landlord. Since you own the apartment, you’re the one who’s tasked with handling any issues that affect your tenants’ lives at the property. You’re responsible for handling maintenance requests. If the toilet gets clogged, you have to hire the plumber. If the AC stops working, you have to call up a contractor.
If you’re only managing real estate on the side, your schedule might be too busy for you to quickly respond to maintenance requests. But it’s important that you handle maintenance as quickly as possible, both because it’s your responsibility and because happy tenants will want to stay (and pay) longer at your property. Consider hiring a property management company. You’ll have to pay them a monthly fee, but they’ll handle all the maintenance requests for you. If you’re very busy, the work of a property management company can be invaluable.
When you rent out your first apartment, you’ll learn most of the important lessons on your own. But your first experience will go much more smoothly so long as you follow those basic tips on listings, viewings, background checks, and handling maintenance requests.