Five Ways to Make Owning a Rental Property a Little Less Stressful
Owning a rental property can be a great way to make passive income. It can also be a great way to utilize a property that you’re having a hard time selling, or it can provide you with money to cover mortgage payments until you are ready to move back into your home.
However, owning a rental property isn’t all good. Renting out a home or apartment building can be extremely stressful! Don’t feel discouraged and end up selling your property before you should. Here are some tips to reduce the common stresses of owning a rental building.
Hire a Property Manager
If you’re feeling overwhelmed by everything that owning and running a rental property entails, you may want to consider hiring a property manager. They can help you take care of the day-to-day stuff, which includes maintenance and repair, so you don’t have to.
There are different levels of property management for you to choose from. If you’re looking for the easiest real estate investment opportunity, consider a turnkey property that is managed by another company. In this case, the only thing you’re responsible for is providing an initial investment. They do literally everything else, so you can sit back and enjoy earning passive income without any of the stresses associated with owning a traditional rental property.
Price Your Rental Right
If you will be at least partially managing your own property, it’s important to start things off on the right foot by pricing your rental correctly. It’s not as easy as it seems.
First, you should compare your property with other properties in the area so you price yours competitively. Make sure you also account for additional expenses, like maintenance and repair costs.
Don’t automatically assume a higher rent is better than a lower one. Rental properties that are priced well can make finding a tenant easier. A good price also encourages tenants to stick around longer, which means you won’t have to worry about sitting on an empty rental for months at a time.
Screen Tenants Carefully
Having the right tenants can completely transform your experience as a landlord. Good tenants make your job easy. Bad tenants make your job hard.
That’s why it’s important to screen tenants carefully. A few tips include:
• Request an application that includes their current employer, previous landlords, and personal references.
• Run a credit check
• Run a background check
• Interview the potential tenant in person
You do have to be careful though. It is important to know the laws where you live when it comes to declining applicants. For example, The Fair Housing Act prohibits discrimination due to race, color, national origin, religion, sex familial status, or disability. You don’t want to find yourself in trouble because you declined a tenant’s application for the wrong reasons, even though it may have seemed right at the time.
Be Transparent and Line Out Expectations
There are things you will assume about how your relationship with your tenant will go. There are things your tenant will assume too. That will just cause trouble when either your or their assumptions are proven wrong.
Be as transparent as possible, and line out your expectations ahead of time. That includes things like how often you will be inspecting the property, as well as the consequences for certain behaviors, like adopting an unapproved pet or throwing loud parties. If you outline these expectations in the lease, make sure you take the time to walk through the lease with your tenant so you know that they know what they’re agreeing to.
Protect Your Property
You want to provide a comfortable living experience for your tenants, but you also have to protect yourself, which means protecting your property.
A good lease is important, but so is having the right rental insurance. Regular coverage isn’t going to cut it if you’re renting out your home, even if you’re only renting out your property for a short amount of time.
It’s also a good idea to talk to your tenant about renters insurance. Damage to their personal property won’t be covered by your insurance. It’s important for you to be clear about that when they move in to avoid possible frustration later.
Owning a rental property can be right for you, but that doesn’t mean it will come without a certain amount of stress. Fortunately, you aren’t stuck with that stress. Follow the tips on this list and you can worry less about your investment property.