Don't get SCAMMED!
Hobby Landlord like a Professional!

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Recommendations For Being a Great Hobby Landlord

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Get in agreement with your spouse!

Rental Investing is an up and down business! If you are not on the same page with the significant other in your life, it can be disaster! When the rent does not come in, or you figure out that a renter is awful, it can lead to serious arguments! When the $10,000 bill comes in for a new roof that you did not anticipate, things can get tight around the house and there can be a LOT of "See, I told you so!" going on. Don't make investments that you are not BOTH on board with.

Always look for warning signs that you are being scammed.

Desperate renters try to look like the best candidates of all. They tell you EXACTLY what you want to hear to get your confidence. If you detect any of the warning signs I mentioned, reject them. Another renter will come along. The price of waiting a few more weeks to find someone good is TINY in comparison to the cost of getting a bad renter out and repairing the damage they do!

Keep good rental records!

Record everything! Keep records with dates for everything - payments, conversations, agreements (i.e. "You said on 12/5 that you'd be sending me a payment of $XXX on 12/17.") Find a good software package for managing your properties, rents, conversations and expenses! Learn what expenses are deductible and claim ALL you are due. Write stuff down and have the renter sign it. It doesn't have to be that formal. People will honor agreements that are in writing because they know they can be made to.

Fully understand Section 8 before getting involved with it.

Some landlords love Section 8, some hate it! Fully research it and understand it before you get involved with it. The positive side is, of course, the regular rent payments. The negative side tends to be people who don't pay their own rent tend to not take care of your property.

When you talk to perspective renters, ask a lot of questions.

Ask question, after question, after question. If you don't ask questions well, have a partner who does or make a list. Renters will generally want to have a good relation with the landlord and will generally humor you in your questions.

Know what you legally can and cannot ask.

Don't ask for trouble by running afoul of government regulations on fair housing regulations. This can cost you BIG! Compliance with housing laws is VERY important. If you don't intend to educate yourself in this area, you don't need to get into this business.

Budget for major and minor maintenance.

Put money aside for maintenance. When you need a new roof, or to replace the floors, you don't want to be hit with major unexpected expenses. Also, don't let minor maintenance slip. If you ignore air filters, renters will remove the dirty ones and let you unit's coils get clogged. That cost's MUCH more to fix than to keep current on your filter changes.

Learn to recognize people who can't get past a professional screener.

Some people will search out individuals who manage rental property as a hobby. They do this because they know they can't get past a professional screener due to their financial history. Thus, the poll of potential renters you may face may be of significantly worse quality than those faced by a property management firm. Learn how to avoid these people.

Figure out the best place to advertise your property.

Depending on the situation, yard signs may work or not to advertise your property. I tend to invest in properties on main highways (for future commercial potential) so yard signs work well. On a cul-de-sac, they may not work at all as few people will ever see them. Newspapers, on-line, and a rental listing agency all have potential. We have noticed that rental listings that people have to pay for generate a MUCH better quality of renter than newspapers.

Befriend the neighbors of your properties.

When you make friends with the neighbors of your property, they will watch the property for you when it is vacant and they will inform you when renters damage your property. It is nice to have them help with the monitor of your property. We've also had neighbors recommend good prospective renters for the property. No one wants to live next door to bad renters, so they generally recommend good people.

Be VERY careful about renting properties that you have an emotional attachment to.

Rental property gets damaged! Get used to it. Build it into your pricing and repair plans. Use materials that are durable! Pretty things are quickly broken! Use unbreakable switchplates and outlet covers. Get used to replacing blinds. Water damage happens to hardwood and laminates. If you rent a property that you love - your home, or maybe the home you grew up in, be ready to deal with the emotional problems that come with people damaging it.

Actually check references and run credit histories.

It is easy to let this slide by. Be professional about it and complete the process. References will often contradict the details that the renter provided you (since you asked so many questions of both.) Run a credit history, it will tell you whether the info they provided you already is accurate.

Get more than one number for your renter.

Get a work number, cell number, parent's number, etc. You use these when you check employment and references, so you know they work. Keep them. When you renter doesn't answer, you'll be glad you have some additional numbers to use to track them down.

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