Introduction
Whether you’re thinking of renting your house out or are in the market to purchase a new rental property, becoming a first-time landlord can be daunting. There are many things to set up and consider, and it can be difficult to juggle it all. However, renting out house responsibilities don’t have to make you stressed. Below is a set of responsibilities to get you started as a new landlord.
First Property Checklist
To help you navigate the process of leasing your first property, here’s a checklist for landlords investing in their first rental property. Later in the article, we will go into detail about some of these steps, so keep reading to learn more.
- Arrange for a property inspection
- Schedule contractors for needed repairs and cleaning
- Check zoning laws and local requirements
- Research and buy landlord insurance
- Draft a lease agreement
- Screen potential tenants
- Collect payments like rent and security deposits
- Set up online rent collection
- Move in tenants
Arrange for a Property Inspection
To keep residential buildings safe, all properties are required to meet health, safety, and building codes. This ensures that your tenants are housed in habitable conditions. Be sure that your property has the following:
- Proper electrical wiring
- All necessary services like hot water, running water, and heat
- Enough space for the number of occupants in the unit
- Working smoke and carbon monoxide detectors
- Stable foundation
- No infestations or hazards like mold or bed bugs
At a minimum, you’ll need to set up inspections for the following systems:
- Electric
- Gas
- Plumbing
- Walls, ceilings, roof, and other infrastructure
- Hot water heating
Inspections can be costly, and they are a recurring expense since you need to conduct them annually or sometimes quarterly. Doing so is an important part of being a good landlord, though, since avoiding potential lawsuits and, more importantly, exposing tenants to hazards should be some of your main concerns.
Schedule Contractors
Unless you come from a construction or contracting background, you should always hire a professional to perform home maintenance duties on your properties. Some common repairs to hire contractors for are:
- Electrical repair
- Installing new appliances
- Extermination/pest removal services
- Replacement or treatment for damage from water or mold
You’ll also most likely need to arrange for a deep cleaning of your property. Although you could perform this task yourself, hiring a professional cleaning company will ensure that the job is done thoroughly and properly, since they most likely have top of the line janitorial supplies to help them.
Check Zoning Laws and Purchase Landlord Insurance
An important step in renting out your first property is to check with local zoning laws and regulations to see if you need permission to use that land for residential use. While researching zoning laws, it’s a good idea to also check on your state’s landlord/tenant laws to be sure you aren’t unknowingly violating a state real estate law.
Next, look into purchasing landlord insurance. This type of insurance is a special kind of policy only for landlords and it protects you and your assets from legal liability, natural disasters, property damage done by a negligent tenant, or any other kind of financial loss.
Draft a Lease Agreement
It’s always best practice to create lease agreement and have a tenant sign a written lease agreement.
Oral agreements can get to be confusing and complicated, and written agreements serve as a reference if you need to go back and look at the terms you and your tenant agreed upon at move-in. Also, if you need to evict a tenant for any reason, having a physical lease agreement makes it much easier to do so.
Since leases tend to be somewhat complex, it can be a good idea to look up your state lease template online and download that instead of making your own.
Screen Tenants, Collect Payment, and Set Up Online Payment Collection
Screening tenants is a responsibility you should not take lightly, since the more screening you do, the more of a chance you have at having reliable and responsible tenants. At a minimum, you should conduct credit, eviction, and criminal history checks. Be sure to follow your state’s legislation regarding these processes.
Once you have your tenants chosen, be sure to collect and organize your tenant’s security deposits. It’s best to keep these deposits in a separate bank account from your personal funds.
These days, many tenants prefer the ability to pay their rent and fees online. Being able to pay rent online allows them to set up automated payments, which saves you and your tenants time, money, and stress.
Conclusion
After following the steps in this checklist, hopefully you feel more prepared to start moving tenants into your new rental property. Real estate investment can be very lucrative if you do it properly, so take the time to follow the above steps to the best of your ability.
