Are you thinking about buying an investment property in the Austin area? Before you do, ensure you can handle the responsibilities that come with being a landlord! What are the responsibilities of being a landlord? Here are some of the most important and vital to your success as a rental property owner:
Live close to your rental property
Why should you live close to your rental property? Residing in the same city as your rental property allows you to inspect it every once in a while, handle repairs yourself and actively market and show the property to potential tenants. While these responsibilities are easier to handle if you live near the property, you can hire a property management company to handle these responsibilities for properties in other cities.
Educate yourself on landlord-tenant law
As a landlord, you should educate yourself on both the state and federal landlord-tenant statutes. State laws cover security deposits, access to the property and notice of time to vacate the property, while federal laws cover habitability and anti-discrimination. Before becoming a landlord, be sure you are educated and well versed on these laws to avoid possible lawsuits.
Enforce monthly rent payments
One of the greatest responsibilities of being a landlord is collecting rental payments each month. To do this, you can’t become too friendly with your tenants – as when you become good friends, it becomes uncomfortable to ask them for the rent payment. Keep your relationship strictly professional and ensure your tenant understands exactly when rent payments are due and what the consequences are if the payment is late. For many, money is an uncomfortable topic – if you are one of these people, consider hiring a property management company to handle rent collection.
Properly screen potential tenants
Always do a background and credit check when screening potential tenants. We promise; the money spent on these reports is well worth it…however, don’t take these reports at face value. Use the credit and background reports as a starting point and from there conduct an interview to ensure you are comfortable interacting with them and ask for references from past employers or landlords. If you aren’t comfortable screening tenants, you can always hire a property management company to complete the screening of potential tenants.
How to properly customize the lease
Every landlord expects different things from their tenants. While you can use a standard lease agreement, always customize it to fit your situation and preferences for your property. Here are some tips on how to customize your lease to fit your specifications.
Conduct regular property inspections
If you would like to perform routine inspections, be sure that point is clearly outlined in your lease agreement. If it isn’t, you won’t have the opportunity to check the condition of your property to ensure everything is in working order. If you inspect the property and find any problems, issue a notice to comply (or complete the repair) and set a timeline for when you will be back to inspect the property to ensure the repair is complete.
Understand the reality
What is the reality of a rental property? It takes time for the investment to pay off – in other words, a rental property isn’t a get-rich investment. If that’s your intention, consider a different investment. The reality is that you have to pay money to make money. You have to get the property ready for tenants, pay property taxes and landlord insurance as well as the mortgage and a down payment of at least 20 percent. In general, an investment property is a long-term investment, where you collect rental checks to pay off the homeownership expenses and hope the property appreciates in value over time.
Can you handle these responsibilities? If you don’t think you’re up for the responsibilities of being a landlord, there is another option. Hire a property management company to take care of your investment property! We, at TALK Property Management, have experience managing other properties in the Austin area and would be happy to help you in any way we can! Give us a call today.