1. Do your research on local properties. Be sure the properties are affordable for your area’s demographics. Keep in mind money may be need for renovations. Starting off as a landlord, purchase something quite reasonable like a one bedroom with one bathroom home or a two bedroom with two bathrooms and a driveway. This way, depending on the price of the mortgage, if you can’t occupy the home or property in an adequate amount of time, the mortgage won’t be drastic to your wallet as a first time landlord.
2. Get insurance to cover your properties. Talk with an insurance agent professional to discuss and gain clarification on what type of insurance is beneficial to you as a landlord and your various properties. Have your tenants be required to maintain renter’s insurance to protect their personal property within the home. But the landlord’s insurance needs to cover fire, flood, and any other disasters like earthquakes.
3. Write your lease. You can form the lease on your own or have an attorney draw up your lease for you. Draw up a standard lease including information like the date the lease will be active, the recording of the deposit, how much is due the day of moving in, the monthly rent, whose the tenants and if they have any children, termination or breach of contract, military guidelines and the consequences of failure to pay rent. Check with your state and city on the regards of practices of leases and tenants.
4. Advertise your properties and yourself as a landlord. Place ads in local publications like real estate books in your city. Use social network sites like Craigslist to post listings of your rental properties. Include where the property is located, the number of bedrooms and bathrooms, the deposit, if any and what’s due at move in time. To peak potential tenants’ interest, add your name and number to give a tour of the property.
5. To pick the best tenants, do a background check. For example, call the tenants’ place of employment to confirm their occupation and to get feedback on the tenant’s attitude. Do a credit check to make sure they’re qualified. Ask for three references that aren’t family related and their contact numbers. Reach out to those references to see what their point of views are on the regards of the potential tenant borrowing any money and how was the repayment process, if they have known for the potential client to be good with managing money and paying on time.
6. Think about hiring a property manager if you’re purchasing more than three properties. Start your property manager off at a part time position to cut the cost of overhead or accounts payable as a landlord. Your property manager is responsible for administrative or clerical duties like filing, answering telephone calls, bookkeeping and record keeping. Property managers may be sometimes need to serve eviction notices to tenants or collect their monthly rent payments.