So you finally did it! You’ve spent years reading about others finding success in real estate. Once upon a time you may have thought it was impossible. Yet here you are. You’ve finally decided to get on the property ladder. But you’re not looking to live in this new property of yours. You’re looking to make a steady, passive income by renting it out.
Whether it’s a three-bedroom house or a studio apartment, renting is a spectacular idea. But many new landlords underestimate the task that’s ahead of them. They think it’s as simple as finding a decent-looking tenant or tenants then collecting a monthly paycheck. But the landlord process can be quite a bit more overwhelming than some might imagine. Here are some the areas that new landlords often report trouble with.
Advertising the property
Advertising may seem simple before you really start to think about it. You just put some adverts out and wait for great candidates to check the place out, right? Well, it can be as simple as that. But it depends what your preference is when it comes to tenants. If you think the place would be better suited to the older generation, then you may want to focus on print advertising. If you want to target younger prospects, then you should focus advertising on digital platforms like Craigslist. (Of course, if you want to target a specific demographic, be careful! You don’t want to run afoul of discrimination or fair housing laws.)
Whatever you do, you need to approach the advertising as you would for a business. That means potentially looking into social media marketing in order to widen your outreach.
General property management
A lot is going to be expected of you by the tenant. So you’re going to need your schedules clear for available for communication and potential work on the house if you want to be a landlord. Even though they’re prepared for hard work, many new landlords find themselves surprised by how busy this property will keep them.
This is why many landlords actually outsource this stuff. Tenant communication, payments, repairs – you hire property managers to sort these things out for you. This is a great option for those wanting to make a profit in real estate but may be too busy to give tenants the focus they deserve.
Increasing the rent
This is really something you should avoid doing unless you’re really missing out by not doing so. But the chances are that you’ll eventually need to raise the rent. As property prices rise, you may find that your property increases in worth. Sad as it is for the tenants, it means you’re missing out because you’re not technically undercharging them!
Of course, you could opt to keep the rent as it is. But if you do decide to raise the rent, then you need to be careful with how you go about it. If you’ve got a contract with the tenant that ensures their tenancy till a set date, don’t raise it before that date. Before you raise it, discuss it with your tenant. In all likelihood, they will understand. It is, after all, basic real estate. But some may get angry, so be sensitive!