The average salary in the United States is $76,370 per year. Landlords who own investment property can substantially add to that figure as a side income.
Being a landlord is a great way to earn extra income while doing very little. Once you've found the right tenants, it's just a matter of collecting rent and ensuring the property is well-maintained. But if you're not careful, things can get out of hand if you're not managing your Sacramento investment property properly.
This blog provides five excellent landlord tips to help new landlords avoid common rental problems. Keep reading and start making your life easier today.
Tip #1: Have a Written Lease Agreement
The first step when becoming a landlord is having a written lease agreement. Once you've found your ideal tenants, they must sign a rental contract to live on your property.
This lease will state all information that is relevant to the rental. For example, it will declare the rent fee, due date, lease length, etc.
You want to ensure that you consult with a legal professional or a property manager when compiling this document. This way, you can ensure you're sticking to the letter of the law in your state for rentals.
Tip #2: Treat Your Investment Like a Business
Whether managing your rental property is full-time or part-time, you should treat it like a job. This means you should comply with local, state, and federal laws. If you don't, you risk encountering legal problems later on.
As with any business, landlords want to protect themselves from liability or accident claims. This means you should consider taking out landlord insurance, which can come in handy in an emergency.
Tip #3: Thoroughly Screen Potential Tenants
Next, you want to avoid renting to bad tenants. For this reason, thoroughly screening potential tenants can help reduce the chances of headaches later.
A proper and thorough background check will give you an overview of the potential applicant's credit, rental, and eviction history and list any legal history they may have. This can go a long way to helping you make an informed decision about who you choose to rent your investment property to.
Tip #4: Make Things Convenient
Whenever possible, make things convenient for you and your tenants. One way to do this is to use technology like a tenant portal. A tenant portal allows your tenant to:
- Easily communicate with you
- Make repair and maintenance requests
- Review their lease
- Access important documentation
- Make rent payments
- Have access 24/7
Landlords 101: Passed!
Being a landlord can be a great way to earn extra income and build wealth. However, being prepared and properly managing your investment property is crucial.
You want to make things convenient for all parties, screen potential tenants, treat your investment property like a business, and have a written lease agreement drawn up. Following these tips for landlords can increase your chances of success.
If you'd prefer not to take on the responsibilities of being a private landlord, contact us today. We at PMI American River are a full-service property management company in Sacramento, CA, with experts waiting to help.