If you’re a new rental property owner, things can seem pretty overwhelming at the beginning. From screening prospective tenants to insurance policies to city inspections, monthly accounting, bill paying and more, there’s a lot to do and remember.
The most useful tip for a new landlord is to get organized from the start, which will increase your chances for rental property success.
Learn the Laws of Your State
Set aside time to study your state’s laws regarding tenant-landlord relations and what is allowed versus what isn’t. This will prevent you from accidentally overstepping some boundaries of regulations you weren’t aware of.
And remember that you will likely have separate city and state laws to know besides federal laws that apply to everyone. This is where hiring a full-service property management company can be beneficial.
Imagine You’re the Tenant
You probably had an inspection done when you first bought the rental property. However, now it’s time to take a look at the property with a different set of eyes, examine it as if you were a tenant yourself. Are there any updates that need to be made for attracting and keeping quality tenants long term? Does anything need to be replaced, such as carpeting or appliances? Would a new coat of paint update and help the living space appear brighter? What about the exterior?
Make Sure You’re Covered
Make sure you get insurance right away if you didn’t include it in your purchase. Insurance is crucial to protecting your investment in the case of damage. Remember, liability coverage in the case of damage or injuries to guests or tenants on your property. A property management company, like MRE Property Management carries a million dollar umbrella policy for all of their rental properties. If you choose to hire a property management company, be sure to ask if an additional umbrella policy is offered.
If you obtained a policy when purchasing the property, take time to review it and be sure it’s correct for your situation.
Meet Current Tenants
If the rental property you purchased already has tenants living there, introduce yourself and ensure they understand how best to contact you.
Set a Clear Payment Schedule and Maintenance Plan
From the beginning, you’ll want to set up systems for maintenance and payment. Will you handle maintenance issues yourself or hire someone to do it? Make a list of companies to call for plumbing, heating and cooling, electrical problems, and more.
Also, set up a payment system that will work for both you and your tenants. Typically rent is due on the first of the month with a 10% late fee that is accessed for all payments received after the 5th of the month. If you own or plan to own several rental properties, you’ll need an accountant for dealing with finances, year-end statements and bill payments. You might also consider working with a property management company for managing payments, late notices, evictions, tenant collection and other duties.
If you have further questions, we would love to help. Call MRE Property Management today at 248.394.0464. Serving Oakland County, Macomb County, Lapeer County and parts of Wayne County.
