What does a landlord do? How to own rental properties

Are you tired of living paycheck to paycheck? Do you hope to build real and lasting wealth one day?

Then you need to start investing. And not just buying shares here and there. It is necessary to acquire rental properties.

Real estate has created far more millionaires in the US than any other asset class. And contrary to what you may think, you don’t have to be rich to get started and become a homeowner.

But what does an owner do? And what does it take to buy and manage rental properties?

The answer to those questions is your ticket to building wealth. Read below to understand your landlord responsibilities now.

Owners buy, rehab and rent properties

Wondering how to become a homeowner? The first thing aspiring homeowners do is purchase a property. And this is the most important activity that real estate investors should focus on.

There is a lot that goes into buying a rental property. First, you will have to choose a target market. If you are managing it yourself, you will need to be in your local area.

You will need to get pre-qualified for a loan. You will most likely get a conventional investment mortgage. This means that you can expect to deposit at least 20%. Check out this guide for tips on securing financing.

Once approved, you need to find a good deal. This is much easier said than done, especially in a heated seller’s market. The most successful investors develop strategies to find properties before they are for sale. It is the best way to enter at a good price and ensure monthly cash flow.

Once you buy a house, you’ll probably have to do a little work to get it ready to rent. The better the property, the more you can charge. It will also attract higher quality tenants.

Once you’re ready to go, you can post your unit for rent.

What does a landlord do? They market their Units

Owners then need to market their properties. The more people see your rental unit, the more people will apply. This gives you the opportunity to choose the best possible tenant who will be nice to your property.

There are physical marketing methods, such as putting up “For Rent” signs in the yard and down the street.

But most strategies are digital these days. You will want to list your property on various websites. Some are paid and some are free. You can also publish it on Facebook Marketplace.

During times when rentals are in high demand, this task is made much easier as renters are desperate and will apply for each new listing.

Applicants Screen Owners

Once the applications start coming in, you will need to fill out all the applications and make a list of prospective tenants. By using an online application system, it is much easier to submit applicants based on certain answers.

If you want tenants who are likely to stay two or more years, you can sort your applicants to show only those people, for example.

You’ll also want to run a background check on prospective tenants and decide whether or not a certain person is worth renting to.

Owners create a lease

Landlords, usually with the help of an attorney, will need to create a lease. This is a very important document that will either protect your success or ruin your investment potential.

Be very careful how it is written. You want it to benefit both you and your tenants. But you don’t want loopholes that could put you in big trouble if something goes wrong.

Landlords keep their end of the lease

Your main job as a landlord, once someone lives in your unit, is to fulfill your part of the lease. The lease will dictate exactly what you, as the landlord, will and will not do.

If you say you will complete repairs when something breaks, then you must do so in a timely manner. If it says the tenant is responsible for the repairs, then it won’t be necessary.

Most of the time, when you own only one or multiple units, there is not much you need to do as a landlord. Once her units are rented out, she becomes mostly passive, unless she has problem properties or problem tenants.

Landlords chase rent checks

Every landlord’s least favorite activity is chasing monthly rent checks. Even if you approve of the highest quality tenant, there is a chance that you will forget to pay your rent or try to avoid it as long as possible.

It is up to you to know how you are going to get your money. And the steps you will take should be spelled out in the lease.

For example, there could be a grace period of one or two days. On the third day, if the rent is not received, the tenant will be charged a late fee.

You can send emails, text messages, phone calls, and physical notes to your tenant to remind them.

But one of the best tips for landlords is to use an online rent collection platform.

Using an online portal that allows your tenant to pay rent with a bank account or debit card makes it much easier for you and them. They can even set up automatic monthly payments and you can provide a monthly discount for doing so.

Leasing the easy way

Of course, not every rental property investor wants to have this list of responsibilities on top of their day job. It can take quite a while unless you earn enough from your rents to quit your job.

This is why so many smart investors will hire a property management company. They will complete all of the above (minus the purchase and remodeling of the property) on your behalf.

Simply pay a monthly management fee for each property you own and you’ll seamlessly collect your rent every month.

How to own a rental property the right way

So what does an owner do? If they manage properties themselves, they do quite a bit. Most of it is before the unit is rented.

But smart homeowners will hire a property management company to handle all of this on their behalf so they can focus on finding new deals and growing their portfolio.

Looking for more homeowner tips like this? Head over to our blog to keep reading.

Also posted on Medium.

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