6 Crucial Things a New Self-Managed Landlord Needs to Know

rental property
rental property

As a new landlord, managing your property can be both exciting and frightening. Being a landlord is a difficult job. Not only are you responsible for finding tenants, but you are also responsible for fixing the house if it gets damaged. If your tenant is having problems paying the rent, there's nothing much you can do except evict them and try to find another one. Luckily enough, as a self-managed landlord, you will have more control over your property than regular ones.

Screening a Tenant 

Self-managed landlords are always looking for ways to improve their business. Two elements affect the profit from a rental property: the market rent and the loss from bad tenants. In this article, we will show you how to screen tenants once you become a self-managed landlord.

First of all, you should choose your tenants carefully. It’s important to know who your tenants are and where they come from. If possible, ask them to provide a reference from their previous landlord and to demonstrate they have a good credit rating with the three main agencies (Equifax, Experian, and Callcredit). Of course, you have to use your gut feeling to some extent. 

Document Everything

As a new landlord, you have to track your income and expenses. That way you’ll be able to determine your cash flow, which will help you make smart financial decisions.

But as a new landlord, it can be hard to know where to begin. To keep it simple, take pictures of the property when you first move in. Document any maintenance issues, like leaky faucets or broken appliances, that need immediate attention.

Then, each month, take pictures of the property after a thorough cleaning. If you are unsure about how to calculate income and expenses for tax purposes, consider tax software like TurboTax. You should also click here and check out some of the best property management software that may drastically ease your troubles as a landlord. It does so by helping you collect rent, screening tenants, communicating and streamlining tenant requests, and more. 

Get Renter’s Insurance

As a new landlord, you are responsible for the property and tenants, so it is important to know what you have to do to make sure that you have your bases covered in case something bad happens. One thing you will want to do is get renters insurance as soon as possible.

It’s easy to look at your expenses and think that renters insurance isn’t a necessity, but it is! There are many ways that renters insurance can help protect you from liability, which is something that landlords need to be concerned about for obvious reasons.

Do a Credit Check on Yourself

A landlord credit check costs between $20 and $50, so it is a small price to pay for significant peace of mind. Many landlords have a difficult time understanding their credit reports, which are usually a key factor in the process of getting financing. Oftentimes landlords don’t find out that they have a bad score until they apply for a mortgage and are denied.

Evicting a Tenant

A landlord who has never owned a rental unit before may find themselves in a situation where they have to evict a tenant. This is often an uncomfortable task for new landlords, but there are many reasons why it is necessary.

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A landlord needs to know the law of the state in which they own their rental property. Each state has distinct laws about evictions, and knowing these laws can prevent a landlord from making costly mistakes.

If you're a landlord who has never evicted a tenant before, here's what you need to know:

The tenant must be given a reason for the eviction. In most states, the landlord must give the tenant a written notice stating why they are being evicted. This notice is called a "notice to quit." The notice to quit must be served on the tenant. If the tenant does not move out after receiving the notice, then the landlord can file an eviction lawsuit in court.

Common Mistakes

Landlords who have just started renting out their properties are often inexperienced and make a lot of mistakes. This is understandable, as they are new to this business, and they are learning. However, with the right advice, they can avoid making common mistakes, and instead enjoy success in their new venture.

Here are some of the most common mistakes made by new landlords:

Not getting a proper property management company to manage the property

Not getting the right tenant

Not doing any maintenance work

Not advertising your property

Having a low price

Becoming a landlord may seem like a simple task. Unfortunately, it’s an undertaking that requires time and effort to ensure your rental property is successful. By following the steps in this guide, you will be well on your way to becoming a great landlord.