With the recession driving more and more people to find side hustles, renting out property is becoming an increasingly popular method of earning passive income. If you’ve recently decided to start making some money off one or all of your properties, you’re not alone. A surprising number of “accidental landlords” are joining the ranks of rental property veterans.
Housing will always be necessary, which makes real estate such a valuable industry even during times of economic crisis. If you’re not currently living at a property or your property has an extra room or suite to put to use, you will likely find it advantageous to start using it as a rental. However, there are a few key facts to keep in mind before you take a step into this brave new world.
- Know your tenants’ financial history.
Plenty of landlords learn the hard way that it’s important to learn who you’re renting to. All manner of tenant horror stories are available online to read if you feel like losing faith in humanity, but knowing what you’re getting into ahead of time can severely decrease the risk of renting to a troublesome tenant. To avoid the risk of being swindled, scammed, or lied to, ensure you learn about your tenant on a personal basis.
This goes beyond the simple home tour, where you and your tenant will both likely be on their best behavior. Meeting your tenant in person can be helpful at getting a feel for the type of individual they are, but you might not see any red flags at first glance. It is strongly recommended that you learn their credit and employment history so you can gauge how likely they are to be fiscally responsible. You can weed out the unreliable tenants by viewing applications submitted via free rental application software.
- Stage the home and set a good example.
If you’re like most landlords, you will be a bit nervous before a home tour, and that’s okay. No one makes a flawless first impression, and you are certainly not expected to. However, it is advisable to take a few steps to “upsell” your property by making it look more welcoming and peaceful. Do a thorough cleaning of all the rooms, especially those that are likely to get a lot of traffic. If the walls are looking a little shabby, give them a fresh coat of paint.
Getting off on the right foot with your potential tenant is crucial to ensuring you maintain a long-lasting, positive relationship with him or her. Consider that they might have been let down by a landlord in the past and are hoping that you will be a more reliable property owner, just as you are hoping they will respect your property. The day of the tour, ensure that you look presentable, too. Need to buy a new outfit for the occasion? Try online clothing boutiques for sales you might not be able to find elsewhere and to develop a specific, curated wardrobe.
- Use landlord software.
You don’t need to be a professional accountant to keep track of documents related to your rental properties. If you’re not great with numbers, the prospect of keeping a spreadsheet is likely to send shivers down your spine, but don’t worry. Landlord software is increasingly easy to use and often free or low-cost.
Software designed for landlords is useful for tenant screening as well as collecting monthly rent checks. In addition, it allows you to send yourself reminders to keep up with repairs and maintenance, if necessary. It has arguably never been a better time to become a landlord.