So, You Want to be a Landlord

The following details pertain to those maintaining the rental on their own –

• Create an operating budget.
  • What are your monthly expenses (track everything!)
    • Mortgage, insurance, taxes, water/sewer/garbage, yard maintenance, association fees
  • What is your net profit goal?
  • What are the tax implications? Rent collected is counted as income.
    • You may be able to take deductions for interest, insurance, maintenance, etc, but you need to carefully track all expenses and KEEP ALL RECEIPTS!
    • Check out IRS Publication 527 to learn what can be deducted and what cannot.
  • Determine your rental readiness timeline.
    • What needs to be done to make the home rental ready?
  • Establish a maintenance plan.
    • Who does the tenant call if there is a problem?
    • What are tenant responsibilities vs. landlord? You don’t want to be notified every time a light bulb burns out!
    • Who pays for service calls and/or supplies and labor?
      • If the tenant pays, the amount could be deducted from their rent payment for the following month.
  • Research rental rates in your area.
    • Comparable properties
    • Location appeal
    • Updates and upgrades to the property
  • Establish deposit amount(s).
    • Security
    • Pet
    • Cleaning
  • Determine your tenant requirements prior to listing the home.
    • Pets, Y/N?
    • Number of renters: single family or multiple singles?
    • Smoking, Y/N?
    • Co-signors allowed?
  • Figure out the best advertising options for your location.
    • Craigslist
    • Social Media
    • Front Yard Sign
    • Word of mouth
    • Newspaper (This seems obsolete, but our last tenants, who were with us 18 months, found us through the online classifieds!)
  • Implement a tenant-screening plan. DO NOT MISS THIS STEP!
    • We’ve used David, from Tenant Screening Now, and know that if he says someone is right for us, we need to get a lease signed as quickly as possible! Screening companies take the guesswork out of deciding if a potential tenant is the right fit for your property. You establish your desired criteria with the screening company, and they provide all the information you request. Win-Win!
  • Sign the lease!

Not all tenants will be perfect, but hopefully by following these steps you will establish a landlord experience bound for success!

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