Being a landlord comes with responsibilities, and sometimes uncertainties. It is a big decision to screen and select a tenant to respect your property and care for it the same as you would.
But assuming the role of a landlord doesn’t have to be complicated. You just need to understand the basics of how to rent a house and become a landlord.
Finding tenants
What makes a quality tenant? As a landlord, you have the ability to establish criteria when looking for someone to rent your property, such as “smoker-friendly” or “pet-friendly”. You can also screen for income bracket, employment history, and/or references.
It is possible to find renters through word of mouth, by advertising on sites like Craigslist, or even by putting up “For Rent” signs. While these methods have varying degrees of effectiveness, they all tend to be time consuming and add extra steps to the search.
The simplest way to screen potential tenants is through the use of a rental application. Using a comprehensive and customizable application process will help establish criteria, screen tenants, and accumulate a living history that can add peace of mind to your decision-making process. It is even possible to require eviction history and references from previous landlords.
Get organized
Using a program that combines all the necessary information for multiple renters can ease the screening process and make becoming a landlord second-nature. Utilizing software geared towards landlords is an ideal way to save time and hassle each month, while keeping up with multiple properties and inhabitants.
Organization is essential to being an effective landlord. Staying on top of rent due dates, scheduled repairs, and contract dates are important to property management. Remember that income generated from tenants is applied towards monthly loan payments, and therefore necessary to be collected on time, in full.
Before looking into organizational programs, understand the ins and outs of being a landlord. Think about what type of property you want to rent out: what are the operational costs and annual need for repairs, and how much money to reserve towards them, and who will manage any repairs?
Having an understanding of the intricacies of a landlord-tenant arrangement will make researching property management software easier. Knowing what aspects of DIY management will take the most time and require the most assistance also helps a lot with your search.
Time to buy
Before assuming the role of landlord, it is necessary to have property available. For most property owners, financing is required, and this is the first step in the shopping process.
Having a pre-approved home loan dictates a budget and sets perimeters with which to shop real estate. Home loan pre-approval gives peace of mind that you are a qualified purchaser and it makes vendors take negotiations more seriously.
Pre-approval is the first step to becoming a well-organized home buyer. It can take a few hours or a day to receive an answer about credit-worthiness.
It is important to understand that a home loan pre-approval is not binding to either party: just because there is a maximum spending limit approved does not mean that a property has to be the full value. Pre-approval simply allows a buyer to understand the price parameters within which to shop.
There are many types of loans and mortgage features, all of which can be learned before the application process with research. Knowing what to apply for and the long-term responsibilities of financing will further add consumer confidence and help ease the weight of making such a large decision.
There are even different loan situations for repeat home buyers, those looking to refinance, or those looking at investment.
