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Any and every business venture is full of opportunities as well as challenges.
The rental industry is one of the largest growing industries. With every passing year, people are getting more accustomed to renting spaces rather than building their own houses.
Renting a property to the right tenant is not always easy. It takes proper planning and implementation of the right strategies, or else it can lead to complete disaster.
There is a lot of responsibility that comes with being a landlord. The entire renting process can be extremely intimidating, especially for landlords who are doing it for the first time. However, if it is done the right way, it can be an excellent way to earn extra money and boost your net worth!
Additionally, it can feel overwhelming to try to gauge all the requirements and responsibilities beforehand. For example, what rent should you collect? What if it is too much? Or too little? There are many other questions like these that need answers when you become a landlord.
Whether you have bought new rental property or are renting out your own space, this article will go over a few important tips to help prepare you to face the challenges of being a first-time landlord!
Business
The first thing that every new landlord must do is understand that renting property is a full-time business. It is not like a venture you do just because you are bored. There are many stakeholders involved, and therefore, a properly thought-out plan must be in place so you can outline all opportunities and challenges beforehand.
As a new landlord, you might consider conducting a mini SWOT analysis to give your situation more perspective by identifying the strengths, weaknesses, opportunities, and threats that face your project. This analysis could find that your property’s location is good (a strength), but also has poor infrastructure (a weakness).
Research
Conducting proper research is crucial for new landlords. It will be imperative to learn about how things typically operate in the rental industry, what the basic requirements are, the rights of landlords and tenants, the duties of each, and so on.
Doing proper research will give you more clarity. It will prevent you from making mistakes that may drive potential long-term tenants away.
Laws
There are specific constitutional laws regarding rental properties in all countries, and many new landlords do not know anything about them. This can lead to several problems. As a new landlord, it is essential that you familiarize yourself with landlord-tenant laws in Arizona. Arizona has specific requirements regarding utility charges, the responsibilities of landlords and tenants, as well as procedures for terminating the tenancy.
Another important step is to make sure that you follow all of the procedures required to become a rental property in Arizona. Informing the proper authorities that you wish to rent out your property requires important legal paperwork. Failing to notify the proper offices and authorities can result in serious legal consequences in the future.
You should always fully read and undertake any legal action that may be required before putting up your property for rent.
The Right Price
New landlords often make the mistake of charging a higher rent, which can drive prospective tenants away. The rental industry is highly competitive, so it is not difficult for tenants to find a good and cost-effective home.
As a new landlord, you should conduct a survey and understand the market value before deciding on the final rent. Moreover, if you have never rented your property before, you can charge slightly less than the market price to attract tenants.
Click here to find out how to get more rent out of your Arizona rental property.
Rental Application
Rental applications allow landlords to gain valuable information about their tenants. The application includes material that may help you understand the kind of individual that is interested in your property, such as their name, permanent address, job, the reason for renting, and income information.
As a landlord, you are free to inquire about any of this information before deciding to rent to a particular person. The data provided on the rental application will allow you to make informed decisions about who you want your tenants to be, and who you are renting to. For more help with rental applications and finding the best tenants, read our guide to effective tenant screening!
Written Agreements
To make sure that no aspect of your agreement with the tenant is lost in communication, always draft a written agreement. These documents help clarify information and have the benefit of recording historically the terms of the agreement between you and your tenant.
In written agreements, you can describe everything in detail as you have discussed it with the tenant, such as dates, rent, important clauses, policies, and so on. This means that neither you nor your tenants can refute the terms you’ve agreed upon, holding both parties accountable. Moreover, in case any problem occurs, you will always have proof of the initial agreement with the tenant.
Insurance
It is always better to prevent a problem than it is to treat a problem. The same can be said regarding your rental property. You can protect yourself, and your bank account, from baseless claims by purchasing landlord insurance.
Many companies offer landlord insurance, which protects landlords from unforeseen financial losses that may be caused by different factors such as natural calamities, accidents, among other things.
Insurance can empower you to take measures beforehand that will avoid a lawsuit in case any damage occurs. A bonus? Landlord insurance plans are usually affordable.
Conclusion
The tips in this article are some of the most useful techniques that can safeguard your interests as a new landlord. By following them, you will be better prepared for your new venture and be well on your way to earning extra income!
It is always important to conduct research beforehand and study the industrial market before starting any business. The world of rentals is no different.
Hopefully, the tips outlined here will help you in making the right and best decisions about your property, but if you still have questions, you can contact us here at Paramount Management and Realty.
