Investing in rental properties can be a great way to increase your monthly income. Furthermore, depending on how successful your rental ventures are, you may even be able to quit your existing job and focus on your properties full-time. Of course, this isn’t to say that owning rental properties doesn’t come with its fair share of challenges. Although many first-time investors view rental property ownership as a source of passive income, being a landlord actually entails a fair amount of work.
Familiarize Yourself with Fair Housing Laws
Before reviewing rental applications, you’d do well to familiarize yourself with fair housing laws. By law, you are not allowed to discriminate against applicants based on sex, race, religion or a variety of other factors. In addition to federal housing laws, many states have their own anti-discrimination rules that all landlords need to read up on. Even the appearance of discriminating against prospective renters because of the aforementioned factors can land you on the receiving end of a lawsuit, so taking the time to review fair housing laws stands to save you a considerable amount of time, money and hassle.
Thoroughly Vet Prospective Properties
As a landlord, you’ll be responsible for repairing a vast array of property issues in a timely and efficient manner. Needless to say, older and poorly-maintained properties tend to have a lot more problems than newer ones and properties that have been meticulously maintained. With this in mind, make a point of thoroughly vetting any and all properties you’re considering investing in.
Among other things, you’ll need to vigilantly inspect each property’s structural integrity, electrical setup and plumbing. To help ensure that you get the clearest picture possible, enlist the aid of seasoned building inspectors, electricians and plumbers. Should they encounter any problems, you’ll need to weigh the cost of repairing those issues against how much you stand to make by investing in this property. Catching problems early on is particularly important when exploring multi-family rental investment opportunities.
Properly Screen Rental Applicants
Properly screening rental applicants should be among the foremost priorities of every landlord. When considering potential tenants, it’s important to remember that being able to present oneself well doesn’t necessarily equate to a willingness to pay rent in a timely manner. While first impressions are important in many areas of life, you should avoid being swayed by applicants too quickly. Being a perfectly pleasant person and having a troubled credit history are not mutually exclusive.
So, if an applicant’s credit check reveals a history of evictions or non-payment of rent, you should think twice about renting to them. While bad credit should not be taken as a sign of a bad person, taking on renters with terrible credit represents a risk to your financial well-being. Furthermore, depending on where you’re based, evicting tenants who refuse to pay their rent may prove next to impossible.
Stay on Top of Property Maintenance
Maintenance is a big part of owning rental properties. No matter how new or well-maintained a property is, problems are bound to occur every now and then. Furthermore, the older the property, the more maintenance it’s likely to require.
Putting off important maintenance tasks can be bad for you on a number of fronts. For starters, the longer you let certain problems linger, the more serious those issues will become – and the more expensive they’ll be to fix. Additionally, treating maintenance as an afterthought can do significant damage to your professional reputation, land you in court and make prospective renters wary of your properties. If you can’t afford to maintain a property, you shouldn’t purchase it.
If you’re looking for an effective way to generate passive income, you should give some thought to investing in rental properties. A few smart property investments can provide you with a small fortune on a monthly basis. However, this doesn’t mean that rental property ownership is a completely stress-free undertaking. While being a landlord generally isn’t a very demanding job, there are numerous responsibilities you’ll need to tend to. As such, it pays to do your homework before taking the plunge into property ownership. First-time landlords looking for tips on how to make their jobs easier should heed the pointers discussed above.