Typically there are two categories of landlords out there: the professional landlords and the amateur ones. The latter are often referred to as 'accidental landlords'- people who never treated their home as a long-term business investment, but have become real estate investors due to life circumstances.
Whether they've inherited a property or rent it out for a constant cash flow, accidental landlords often seek professional advice on rental management and passive income.
Being a landlord isn't easy and it takes extra effort to make a good accidental landlord.
So here are a few tips on how to succeed as an accidental landlord:
1. Analyze the rental market and property management trends.
If you're new to this business, start with the basics. For first-time landlords, it's essential to get acquainted with the rental market conditions and try to keep up with local property management trends. By doing so, you'll understand how things work in the rental industry and who your target audience is. For instance, if you're focused on Millennials and Gen Z as your prospective renters, you might want to switch to digital solutions (i.e. start utilizing technology and mobile communication).
Another tip is to treat rental properties as a business. When it comes to leasing, you can't just rely on magical hidden property management talents to surface. You'll need to acquire the skills and knowledge necessary to effectively manage properties.
At the same time, you have to understand your tenants' expectations and be ready to resolve any property-related issues.
2. Keep track of your budget.
By keeping track of your monthly income and expenses, you're likely to develop a money-oriented mindset (in a good way) and optimize business expenses.
For newbie landlords, this financial factor may not seem crucial at first. But once you dive deeper into a business routine, you'll see that conscious financial planning contributes to the future success of your rental business. Plus, when it comes to taxes, you're unlikely to properly file everything without documenting your finances.
The property management industry isn't only about making a profit, you'll also need to invest and spend money. If you disagree with this point, just wait till you receive your first maintenance request.
Related: Best Landlord Property Management Software Solution: 4 Ways to Improve Your Budget For 2020
3. Learn your rights.
Before renting out a property, make sure you're aware of your rights and responsibilities in order to protect yourself and your rental property. From time to time, check out the rental laws and regulations in your state and obtain legal advice if you need specific clarification on an issue.
Apart from landlord legal responsibilities, you should have at least a general idea of the tenants rights. Whether it's non-payment of rent or a broken appliance, you have to act like a professional in each of the scenarios.
4. Find property management software.
Highly effective landlords use technologically advanced tools to automate their daily tasks and expand their rental business.
Since accidental landlords have limited experience with managing rentals, property management software is one of the most helpful digital tools for you to boost professionalism. Any robust property management software offers a range of options helping to create leases, keep track of transactions, resolve maintenance issues, generate financial reports, communicate with the tenants, and even submit vacant units to listing websites.
Prior to letting your first property, make sure you have a good software in place.
Related: How To Choose The Best Rental Property Management Software
Any other tips for accidental landlords? Share your recommendations by leaving comments below. We'd love to hear what you think!
How To Grow A Rental Business: Top 5 Landlord Tips