Owning a rental property is a big decision. Real estate investing is a challenging process to begin, and owning rental properties can add frustration, expense, and a lot of time to the mix. While rental property management can be frustrating, the financial rewards can pay off big.
Owning a Rental Property: Finding Quality Tenants
There are two kinds of tenants: profitable ones and unprofitable ones. Knowing the difference between the two is the difference between success and failure as a landlord.
Finding quality tenants requires a combination of advertising and tenant vetting. After advertising for a vacant property and receiving rental applications, it is your responsibility as a landlord to ensure that the tenant is a good one. To many landlords, that is the hardest part of owning a rental property.
When vetting tenants, use the following sources to find if they will be a reliable, profitable tenant or a money and time drain:
- Credit history – As a landlord, you can access applicant credit scores and credit reports for a fee. This is well worth the time and cost, as it can show you if the prospective renter has their finances in order or a string of delinquencies.
- References – Contact two or three past landlords for a reference. Past landlords can tell you if the tenant paid on time or seriously damaged the property.
- Your instincts – Don’t jump at the first tenant who shows up if your instincts tell you otherwise. Follow your gut when in doubt.
Owning a Rental Property: Repairs and Maintenance
Owning a rental property puts you in charge of repairs and maintenance. Well maintained properties command higher rent and attract better tenants, so it is imperative to keep your property in excellent condition to keep your cash flow up.
When repairs do come your way, do your best to find the best quality fix at the lowest cost. If you can find a trusted general contractor or handyman that does good work at a fair price, look to them as a resource for repairs and property upgrades.
Owning a Rental Property: The Big Payoff
At the end of the day, your profitability rests on two key factors: cash flow and property appreciation. If you can stay cash flow positive while your property increases in value, owning a rental property is completely worth the time and headache.
If you find a property where you may struggle to recoup your costs, you should look elsewhere for a better investment.
Owning a Rental Property: Trusted Advisors
If you are new to real estate investing, you don’t have to do it alone. Find a trusted real estate agent who can help you find the ideal property for your investment goals. An accredited Real Estate Investment Advisor (REIA) may be a great fit for you.
If you are starting the search for a new rental property, you have to start with a great agent. If you are searching for a great agent, start your search with the trusted and vetted agents at Agent Harvest.