How to be a Landlord – A Step by Step Guide
Are you looking to start making passive income through rental properties? Then follow our simple steps to learn how to be a landlord and start cashing rental checks in no time.
Step 1: Buy Property
Purchasing property is an obvious first step to becoming a landlord but it is a difficult one for many to get past. We have a few tips and resources that will help ease the process:
Identify the Right Location. When searching for rental property, pick cities that are experiencing job and population growth to maximize your rental cash flow. Check out this list of Best Places to Buy Rental Property in 2020 for some ideas. Neighborhoods with low vacancy rates are profitable areas to buy in and you can check that by searching for listings on Craiglist, Zillow, or Realtor.com.
Select a Profitable Property. Once you find properties you are interested in, figure out which properties will give you the highest return on investment. You can estimate ROI by using this Free Investment Property Calculator.
Finance It. There are many options available for financing rental properties, it can be overwhelming. We suggest you check out BiggerPocket’s Ultimate Real Estate Financing Guide before speaking to your lender.
Step 2: Prepare to Rent
Once you own a rental property, it’s time to get everything ready to list it.
Create a Lease. Make your own legal lease agreement by downloading this free template and customizing it for your property.
Prepare the Property. Fix anything that is broken, paint walls where needed, clean the entire unit, and take photos for the listing.
Set the Rental Price. To determine how much to rent to charge, use this free rent estimator to get a baseline and then look at what comparable properties in the neighborhood are charging by checking online listings.
Step 3: Find Tenants
Filling tenant vacancies during a pandemic poses numerous difficulties for landlords. Luckily there are lots of new advancements that can make filling vacancies efficient and hands-off.
List your Property. Advertise your property by listing it on any of these free websites, posting in local Facebook rental groups, and putting a sign out front.
Track Potential Leads. Track potential tenant information and follow-up with lead conversations as they reach out to set up showings.
Host Unit Showings. You can perform virtual or contactless unit showings using Rently self-touring technology. If paying for virtual showings is not in budget, you can set up individual showings and have the lead tour the property while you wait outside.
Perform Background Checks. Perform background and credit checks online for interested leads for assurance that the tenant will pay rent and to help reduce tenant turnover.
Track & screen potential tenants for free.
Sign up to start saving time managing your properties in one platform.
Step 4: Move Tenants In
Once you have selected a tenant, it is time to move them in as seamlessly as possible.
Sign Leases. Provide the tenant with a lease to sign and collect the security deposit before they move in. You can sign leases electronically and collect security deposits online using particle space’s free platform.
Share the keys. Meet the tenant at the property on move in day to give them the keys. We recommend installing keyless entry locks so you never have to change the locks or keep track of keys.
Set up Rent Collection. Set up a system to collect rent from your tenants each month. You can automate rent collection, create payment plans, and set up late fees using particle space’s free platform.
Step 5: Manage the Property
The last step in our guide to becoming a landlord provides tips on how landlords can effectively manage their properties.
Communicate with Tenants. Provide tenants with an email or phone number that you check often so you can respond in a timely manner.
Coordinate Maintenance. As tenants make maintenance requests, it is your responsibility to coordinate the repairs. If you have questions as to who should pay for the repairs check out Legal Nature’s article on Landlord Repair Responsibility.
Prepare for Vacancies. Keep track of when tenant leases expire and reach out to tenants ahead of time to see if they plan to renew. This will help you prepare for vacancies and minimize the time your properties are left empty.
Organize your Books. Track all property income and expenses to prepare for tax season. For additional information check out Turbo Tax’s Rental Property Tax Overview to learn more about filing rental property taxes. Particle Space’s free platform will track your financials, invoices, and integrate with QuickBooks to make filing taxes a breeze.