Real estate is a sound investment, offering incredible potential for a steady passive income. And when done right, renting out your property can involve very little work from you personally. But if you don’t consider what goes into a successful rental business, your property could easily become a costly headache. Let’s review some tips and tricks for first-time landlords looking to rent out their property.
Thoroughly Screen Your Tenants
Protect your investment! You’ll want to choose tenants carefully to avoid property damage, lost rental income, and a lengthy eviction process. Before signing a lease with any tenant, you should have detailed information on a tenant’s rental history, credit score, and ability to pay. You’ll also want to obtain their full contact information, alternative contact methods, and even their employer’s contact information, when applicable. Tenants who fail to pay their rent often also fail to answer phone calls, so you want to make sure you always have multiple ways of getting in touch if something goes wrong
Set Bulletproof Expectations (in Writing)
Setting clear expectations for future tenants and formalizing these expectations by building them into the contract can protect you against future liability, such as if there’s a legal dispute. If you’re a new landlord, you shouldn’t try to wing it and make up the rules as you go. Rather, by setting tenant expectations ahead of time, you can effectively protect your property against future losses.
Keep in mind that as a landlord, you also have a responsibility to your tenants. Be sure to provide your tenants with a reliable contact method in case they encounter issues with their property or have an emergency. Additionally, landlords must build trust with their tenants by responding promptly and performing any maintenance that’s deemed necessary.
Have a Maintenance Team
Planning to do property maintenance all on your own? Don’t. It doesn’t matter how good you are at fixing things—a successful landlord will have a reliable team of plumbers, electricians, day workers, and other property maintenance professionals on call. Having a team of reliable professionals who are equipped to expertly and quickly address property maintenance needs results in a better experience for both the tenant and the landlord. While it’s understandable that you might want to fix issues yourself, this is not recommended unless you’re a licensed professional. There’s weight to the old adage that you should “do it right the first time.” Having professionals on standby can save you time and money, especially if you’re renting out multiple properties.
Make Rent Easy
You definitely want to reduce friction for your tenant when it comes to rent collection. Collecting rent online protects against the hassle of both physical collection and depositing a check—not to mention that electronic payment can reduce your risk of being hit with the fees and problems associated with bounced checks. Offering small discounts on upfront payment for commercial leases is also a great option if the tenant is well qualified.
Consider Other Income Opportunities
Rent is only one stream of income that a landlord’s property can generate. Consider “green” tax incentives and rebates that not only directly benefit you but also save the tenant money on utilities. If the property is located on a main road, you may want to consider offering advertising solutions to other businesses. Whether that means hanging a banner ad or installing a billboard, advertising is not something you should overlook. If your building has additional space that’s too small to rent for business, it may be perfect to rent as a storage unit. In any case, thinking outside the box when it comes to revenue generation of a single property is the key to being a savvy landlord.
When in Doubt, Ask for Help
If you’re considering putting your property up for rent and don’t know where to start, we encourage you to contact the professionals at Murphy Commercial Real Estate. We offer guidance and services to both experienced and first-time landlords. Chat with one of our property experts today so we can learn more about your business and set you up for success.