Investing in real estate and being a landlord is a great way to earn money; however, renting property to tenants is not an easy job. If you are considering renting out a property, it is important that you fully understand the ins and outs of being a landlord. Sometimes, you will have difficult tenants who can't be reasoned with, but staying on top of things and following the three tips for property management listed below will help you manage your property in a professional, effective manner.
1. Set Office Hours
This rule applies to all landlords, but it is especially important if you are renting out only a portion of your home and living in the other portion (e.g., you live on the top floor and your tenants are renting the basement). In the your tenants' contract, indicate the hours during which you are available, and remind the tenants of these hours when they move in. Unless you want to be woken up at midnight to fix a leaky faucet, it is imperative that you set boundaries with your tenants. Of course, there will be emergency situations that occur after hours, but for small problems, make sure your tenants know that you are not at their beck and call.
2. Purchase Insurance
No matter how good your tenants seem or how well you keep the house or apartment maintained, it is still important to purchase liability and other property insurance. A good insurance plan will not only protect you from property damage from fires, floods, vandalism, and burglaries, but will also protect you from tenant lawsuits for injuries, discrimination, etc. You can never be too careful, and while insurance might seem like a large expense at the beginning, you'll be glad you have it if and when something goes wrong in the house.
3. Keep a Cash Reserve
Rental tenants can be unpredictable, and as a landlord, you should have a plan in place in the event that a tenant does not pay his or her rent, an expensive repair needs to be made to the house, etc. Keep a decent amount of money set aside (preferably in a second bank account, so you aren't tempted to spend it) for any unexpected payments. As with purchasing insurance, you'll be happy you saved this money if an emergency arises.
Being a landlord can be a stressful job, but following the three property management tips discussed above will help make things easier on you and your tenants. Keep yourself and your house protected, and make sure that you are attentive to your tenants' needs, and you can enjoy the benefits of renting out your property.