How to Be A Smart Landlord

Being a successful landlord takes thoroughness and determination.

Being a landlord may seem to mean earning income without doing anything except occasional repairs. However, there is more to being a smart landlord. If you are not careful, you may lose your hard-earned money to scammers and bad tenants. To earn money from renting out properties, choose the right rental properties, the right tenants and protect yourself. You may also have to hire professionals to do some of the work.

Instructions

1. Buy rental properties when prices are down. This increases the chances of you getting high returns on your investments. Don't purchase a property and rent it out at a loss, expecting that the price will go up. Property values may not appreciate, and you may not see any profits from your rental property if you don't get regular profits every month.

2. Renovate the rental properties to make them attractive to renters. The rental properties have to at least meet the local housing authority's minimum standards. Running substandard rental units may lead to fines from the housing authority and even lawsuits.

3. Screen your tenants thoroughly. Run credit and criminal checks on every prospective tenant to avoid taking on problematic tenants, who may damage your rental units.

4. Obtain landlord's insurance to protect yourself against losses. MSN Real Estate also recommends that you require your tenants to take out renters insurance to cover their belongings.

5. Walk through the rental unit on the day a tenant moves in. Take notes and photos of the unit to document the unit conditions. If the tenant causes damage during his tenancy, you will be able to prove that the damage didn't exist on move-in date.

6. Prepare your own lease because generic leases may not address your unique issues. Talk to a lawyer as necessary. Anticipate any problems that may arise and include them as clauses in the lease to minimize conflicts.

7. Hire a property manager to free up your time. This allows you to purchase more properties and expand your business. You usually have to pay 4 percent to 10 percent of the rent for such services, according to MSN Real Estate.

References

• "Kiplinger"; What It Takes to Be a Landlord; Jeffrey R. Kosnett; June 2011
• "MSN Real Estate"; How Smart Landlords Handle Rentals; Otesa Middleton Miles