Investing in income property can be a wise and financially sound decision, but what are some of the things landlords need to know for success? Owning properties doesn’t necessarily mean you’ll generate the income you need to meet your financial goals! Today our Annapolis property management experts walk through a guide to being a landlord and experiencing long-term success.
Create a Legal Lease
A residential lease agreement protects you as the property owner. Having a legally binding contract helps renters understand when rent payments are due and the rules for living in your property. This legal document also becomes critical when it’s time to enforce the rules. Property managers recommend having a knowledgeable attorney prepare a rental agreement to make sure it follows all landlord-tenant laws.
Know Local, State, and Federal Laws
The rental property industry is heavily regulated at the local, state, and federal levels. Unfortunately, operating without clear knowledge of these laws can lead to lawsuits and income loss. Partnering with an attorney and Annapolis property manager is one of the best ways to become familiar with everything required of real estate owners to operate profitable and legal rental homes. These experts also help you stay up to date and compliant as laws changes over time.
Understand Property Maintenance and Responsibilities
Collecting the rent isn’t only one of the many tasks that come with being a successful property owner! Investors must understand the full scope of their responsibilities to provide maintenance and repairs for rental properties and renters and deliver safe homes. It’s also critical to help tenants understand their role concerning yard upkeep and keeping the home clean and in good condition during their tenancy.
Establish these guidelines before signing a residential lease with your new tenant to set expectations and set up the best success for a positive landlord-tenant relationship.
Establish a Make-Ready Process
Finding new tenants is exciting! However, property owners must get a home ready for new residents before they move in and begin a lease term.
A standard make-ready process helps a property owner tackle everything from repairs to cleaning and painting between tenants. Having a detailed checklist prepared for each of your income properties is helpful to make sure everything aspect of the home is ready to welcome new residents. In addition, taking the time to do an initial walkthrough with the tenant prior to their moving in will document the condition of the property. Providing a move-in checklist also helps new renters have a smooth first few days in their home.
Manage the Finances for Your Investment Property
Investing in residential properties can be exciting, but it also has to make sound business sense. Without managing the finances and setting a budget with realistic income goals, investors can suddenly find that a new investment won't turn a profit. If you’re not sure how to set a good budget or financial plan, property managers can help you research the going rate for comparable rentals in your area, estimate operating expenses, and keep track of income and costs.
Property management companies are the best resources to think through potential expenses, including:
- Monthly utilities (if you include them in the rental amount, then pay those bills)
- Upkeep costs like seasonal maintenance
- Repairs, remodeling, and improvements
- Professional fees
Upgraded and improved rental properties can command higher rents, so it’s important to budget for timely updates to your profit margin over time!
In addition to planned expenses, a property management team recommends budgeting for unforeseen expenses. Even the most well-protected retinal properties can suffer from a natural disaster, vandalism, renters that default, or other significant property damage. Set your property’s rental rate high enough to attract quality renters, cover routine expenses, and have some cash flow left over to set aside for emergencies.
Hire a Reputable Property Management Company
Bringing all of these strategies together can be challenging, especially if you’re starting as a new investor or you’ve managed rental properties on your own so far. One of the best ways to maximize returns and become an excellent landlord is to hire an Annapolis property management company! The best property managers create and enforce lease agreements, understand and follow all regulations, and apply best practices to budgeting, maintenance, and more. Trusting an experienced property management firm can save you time and stress over your investment while increasing profits!
Be An Excellent Landlord With Expert Property Management
The personal and financial rewards of owning an investment property are numerous, but it’s not always easy to tackle on your own. By applying these tips, rental property owners can protect investments, reduce costs, keep renters happy, and enjoy long-term financial success through real estate. If we can help with any additional insights into being a landlord, don't hesitate to the Renters Warehouse BW Metro team! Our professional property management services support property owners in the Annapolis and surrounding areas.
Find the property management company that fits your needs! Use the insights in our free “Guide to Finding the Best Property Manager in Maryland.”