If you've decided to own rental property, chances are you did it to make a profit. But if you want to make money from a rental property, you need to treat it like a business.
Because if you don't, you'll see that your rental properties begin to drain your bank account rather than build it up.
How do you treat your rental property as a business? Here are some tips to get you started.
Don't Always Try to be the Nice One.
Some people have a problem when others think of them as the "mean one." So, they try to be overly friendly and not step on anyone's toes to make everyone like them. If you're a landlord, the problem with doing this is that there's a good chance people will walk all over you.
To prevent this, you need to avoid getting emotional and practice being professional. If your tenant frequently has a sob story to pull at your heartstrings as to why they're always late with the rent, you want to avoid becoming emotional. While you may give a pass once, you need to explain that this can't become a habit. Explain that the rent is due on a specific date. Stand firm and don't back down. Once your tenants know you mean business, they should start paying on time.
Comply with the Law
With any business, there are laws to follow. Being a landlord is no different. Find out what federal, state, and local laws may pertain to your properties and follow them. Ignoring them or being uneducated can cost you in the long run. This is an excellent source to find out what laws exist in your particular state.
Purchase Landlord Insurance
Businesses buy insurance to protect them from unfortunate circumstances. Landlord insurance does the same thing. It protects you from potential accidents and liability claims. For example, if there's a robbery or a pipe bursts, landlord insurance can protect you from being responsible for the cost.
Make Sure Everything Works
Just as you wouldn't sell a product that doesn't work, you shouldn't rent a property that is in disrepair. It's just bad business.
Test appliances, smoke detectors, and carbon monoxide detectors to make sure everything is in working order. This is not only a smart move, so you know nothing is defective before you rent the property, but it's also a good thing to do in the name of safety.
It's recommended that landlords make a pre-inspection list of the unit's condition and its appliances, take a walk-through with the tenant when they move in, and get them to sign off on the state of the property when they move in.
Don't be Afraid to Evict Tenants.
While no one wants to evict their tenants, sometimes it's necessary. Eviction is a last resort when a tenant is not meeting their obligations. If the law is on your side and removal is the only option, don't be afraid to do it to protect your investments. Start the eviction process as soon as they miss a rent payment to signal to the tenant that you do not tolerate late rate payments.
Business owners fire employees who are not holding up their end of the bargain. When your tenant is not doing so either, you may need to evict them.
Choose Tenants Wisely
Business owners do background checks before hiring employees. As a landlord, you should do your homework as well before renting your property. Ask for references to see how your prospective tenants treated their last home. Did they take care of it? Did they pay the rent on time? Do they have a criminal history? These are questions you want answers to before anyone signs a lease.
You want to be sure whoever you're renting to pays on time and is not known to trash properties. You also want to make sure they are not dangerous or have a criminal history. These are all things that can hurt your rental property and your efforts to make money. This is why a background check and a credit check are both excellent ideas when looking for tenants.
While things can always happen and situations can change, it's best not to go into a rental agreement where a tenant already has a few strikes. This is only asking for trouble.
If you're looking to vet prospective tenants effectively, let SingleKey help. They work hard to help you choose the best tenants for your property. They screen tenants and run background checks to feel comfortable with who is living in your rental property.