A great way for you to diversify your investment portfolio is to purchase a piece of property and then rent it out to someone else. However, while this might sound like something that’s going to be an easy way for you to have a steady income each month, being a landlord also has quite a few big challenges that can come along with it. So to help you know how to manage some of these roadblocks, here are three things that can make owning a rental property much easier for you.
Create A Policy For Everything
Before you even get your first tenants in the door, Brandon Turner, a contributor to Bigger Pockets, recommends that you create policies for everything. There are quite a few examples out there that you can look through if you’re unsure where to start. But by having everything in writing and requiring your tenants to sign it before moving in, you can avoid a lot of problems in the future. Especially for those who don’t like confrontation, Turner shares that it’s easy to just point to the policies and have the discussion ended right then and there.
In addition, legal measures can help mitigate issues regarding non-cooperation, squatting, illegal residence or downright refusal after the death of the owner. Following the demise of the rental property owner, it may be tricky for an inheritor to deal with a difficult tenant, especially if he or she is a minor. The property owner could issue lady bird deeds for his/her properties as the ownership would directly be transferred to their legal heirs without the need for probate. That could enable the heir to draw up a legal notice easily to deal with the uncooperative and illegal tenant.
Bring In The Right Tenants
While you might be anxious to get someone into your rental so you can start collecting rent, you’re going to want to take your time with this process and ensure that you get the right people in your rental unit. According to Andrew Beattie, a contributor to Investopedia.com, you should make sure you run credit checks and call all the references that your prospective tenants give you. This should give you a good picture of whether or not this tenant will be a good fit for your property. The last thing you want to do is rush a tenant in just to find out that they’re more of a problem than they’re worth.
Consider Hiring A Property Manager
If you start realizing that actively managing your own rental property is a little more of a hassle than you’d like to have to deal with on a regular basis, you may want to consider hiring a property management agency to take over the day-to-day tasks of being a landlord. A quality property management agency will take care of things like collecting rent, dealing with maintenance issues, handling any evictions, and lots of other tasks. Just be sure that you’re hiring a property manager that you feel you can trust. Otherwise, not only will you have to deal with any issues from your tenants, but you might also have to spend a lot of your time keeping the property management company in line as well.
To help make your investment property a less stressful job, consider using the tips mentioned above to smooth things out for yourself.