If you’re looking for landlord advice, you’ve come to the right place. We have put together a list of the most important tips for landlords from experienced professionals all over the country. Being a new investor comes with its sets of challenges, but it’s also an excellent way to build wealth.
Here are 26 tips for landlords from the pros:
Ryan Coon, Landlord, Rentalutions
One lost repair receipt can be one less tax deduction and one misplaced lease can cost you months in eviction court. Using technology can help landlords streamline necessary tasks like listing their property, screening tenants, signing leases, collecting payments and handling maintenance requests. The last thing a busy landlord needs is to be bogged down with excel spreadsheets and hard copy documents, wasting time and potentially money.
For more information regarding property management software, you can read our guide on the best property management software, including our number one recommendation.
David Lecko, Landlord, Dealmachineapp.com
Requiring tenants to have renters insurance is often overlooked by landlords. What if your tenant does more damage than the security deposit covers? For example, the tenant leaves the stove on or floods the dwelling by leaving on the sink. Your landlord insurance may or may not cover the cost of the damage, but compensation can be sought through your tenant’s liability coverage. Your tenants will also benefit by protecting themselves with policies that cover losses to their personal belongings.
Read the Fit Small Business ultimate guide on landlord insurance for more information.
Sarnen Steinbarth, Landlord and CEO, Turbo Tenant
It’s highly beneficial to set up LLC’s for each rental property to help protect yourself in the case of a lawsuit. An LLC can be used to shield your personal assets from possible rental property-related litigation such as a slip and fall. LLCs also offer tax advantages such as pass-through taxation.
Read the Fit Small Business ultimate guide on business structures like LLC’s, S corp, and more.
4. Document Your Property’s Condition
Andrew Shedlock, Litigation Attorney, Kutak Rock
Take pictures and a video of the property before renters move. Do the exact same thing when tenants move out and compare the two for damages. Document (and keep receipts) of all repairs you had to do because of tenants’ wrongdoing. Have clear records of invoices, receipts and job descriptions. This is the easiest way to head off a challenge from tenants when you have to defend against claims that you’re wrongfully withholding security deposits.
For more information on how to properly document your rental property’s condition, you can read our landlord checklist ultimate guide.
Brian Pendergraft, Lawyer, The Pendergraft Firm
Although municipalities have different regulations regarding what to do with tenants’ security deposits, it’s important to keep them separate from rents received. Some treat the money like it is their own, but it’s actually the tenant’s money. In many jurisdictions, landlords are liable for treble damages and attorney’s fees if they misuse the deposit.
Read our article on free small business checking accounts to find the best business account to use for your landlord business transactions.
Shaolaine Loving, Attorney, Loving Law LTD
By attending to repairs in a prompt manner it saves your property from more damage occurring, which saves you money. It also prevents the landlord from having the tenant claim remedies under the law. If you fix a leak before it worsens, mold won’t have time to spread and the leak won’t damage other parts of the property. On-time repairs also let the tenant know that you’re serious about taking care of your property and they should be too.
Marc Prosser, Co-founder, Fit Small Business
Emile L’Eplattenier, Real Estate Sales Analyst, Fit Small Business
A turnkey property is typically an investment property that’s been rehabbed and seasoned with tenants by a turnkey property company. If you’re looking for a passive real estate investment without much time investment, a turnkey property not only has existing tenants and updated amenities, but the property is also managed by the turnkey property company itself.
The days of a verbal lease and a handshake are over. A written lease is beneficial for both the landlord and the tenant. A lease for a rental property can be provided by a real estate attorney or created online by editing a template to make the lease meet your needs. It needs to include the names and signatures of all parties and should outline all lease terms such as the length, move in date, money given and who’s responsible for maintenance.
Domenick Tiziano, Landlord, AccidentalRental.com
Tenant screening can often be overlooked during a tenant turnover. Many landlords don’t realize the true cost of tenant turnover which is likely their biggest expense right after mortgage interest and property taxes. Inexperienced landlords panic when they receive a lease termination notice and they rush to get any tenant in place instead of a qualified tenant. Little tricks like having a 60-day notice clause in all of your leases and having a re-keyable lock system for all of your apartments can save money on turnover costs.
Read the Fit Small Business buyer’s guide on the best tenant screening services.
Priyanka Prakash, Managing Editor, Fit Small Business
Ian Atkins, Real Estate Finance Editor, Fit Small Business
Cash for keys is a faster alternative to an eviction if the tenant agrees to it. It’s a private agreement between the landlord and the tenant. The landlord agrees to pay the tenant to vacate the property and return the keys. Landlords do this to avoid the often time consuming legal process of filing an eviction with the court which can take months.
Crystalynn Shelton, Accounting Writer, Fit Small Business
Taxes and the IRS should be taken seriously and using accounting software will keep you organized and up to date with your business activities. For example, a hired CPA will be able to use this software tell you what tax deductions can be made and how to depreciate the rental property over time. Accounting software can also generate profit and loss statements in minutes.
Nicole Daniels, Real Estate Attorney, Dinsmore
Work with an attorney who specializes in real estate so they’re familiar with the law. They can help you draft a lease, keep you upto date on zoning ordinances, housing code and guide you through the eviction process. In terms of evictions, in some states judges require strict compliance with the statutes. The demand notice must include the proper language and be served correctly or the judge won’t take your case any further. Look closely at the notice requirements
Jeff White, Real Estate & Small Business Writer, Fit Small Business
Having the proper landlord insurance is essential for all real estate investors.This insurance helps to protect your investment from the expense of lawsuits and/or property damage. Landlord insurance should cover the structure, as well as lost rental income and personal injury occurring on or around the property. The policy differs from the policy on a primary residence since the investment property is a business.
Mike Mcelroy, Landlord and Founder, Center Coast Realty
As a landlord, it’s important to know local laws and regulations. In Chicago, for example, there are numerous often-overlooked hoops a landlord must jump through in order to avoid stiff civil penalties. For example, failing to list the address of the actual brick and mortar bank in which you deposit the security deposit allows the tenant to break the lease, penalty-free, and easily sue you.
Evan Tarver, Real Estate Analyst, Fit Small Business
By investing in an apartment building, you have the space for extra money-making opportunities. Installing a cell tower or a billboard on an unused section of the property provides extra rental income and doesn’t infringe on the tenant’s use of the property. Installing coin-operated laundry machines and vending machines can be another way to bring in extra income.
Upgrades to a rental property can bring added value to the property in the long run. They can also increase the rent and encourage the tenant to stay in the property longer, which helps prevent a high vacancy rate. VISIO offers refinancing options, bridge loans and rental property loans with competitive rates. They usually fund a loan within 21 days.
David Waring, Editor-In-Chief, Fit Small Business
Being a real estate investor is a business and it can be a lucrative one. Keep this landlord advice in mind. By treating it like a business, being organized and knowing the local and state laws, you’re on your way to having a successful long-term investing strategy.