“Simple Guide On How To Run A Rental Property”
Do you know how to run a rental property? Many people have that question in mind.
That’s because a rental business can be a good investment. You can earn a lot from it if you know how to run a rental property.
There’s a long and short answer to the question of how to run a rental property business. But since people today want to know things quickly, I’ll tell you the short one here.
This simple guide on how to run a rental property will give you what you need to know of the topic, but concisely. That way, you won’t waste any time while learning what you should on the subject.
This should help you get started swiftly on your journey as the proprietor of a rental business. So if you’re prepared, let’s begin!
How to Run a Rental Property
Learning how to run a rental property is not that easy. But it’s not that hard either.
There are many things to know how to run a rental property business. But to keep things short, I covered only the things you absolutely need to know to get started.
Some points are essential to learning how to run a rental property business. Others, while also important, can be learned or dealt with afterwards.
This guide to how to run a rental property business is about the essentials. Once you have those down, you have the foundations you need to become a property rental business owner.
Having said that, I’ll start this guide on how to run a rental property business by talking about the licenses that you need to acquire.
Make Sure You’re Operating Legally
If you want to know how to run a rental property business, you need to have an idea of what licenses or permits you need to obtain.
Apart from that, you have to make sure that your rental property business is registered. This helps you avoid violating any laws in your area.
You need to get a license so you can legally carry out the tasks of a landlord. This will also protect your property, tenants, and personal assets.
If your business is legal, you have leverage whenever a problem arises between you and your tenant. You will put yourself and property at risk if you fail to acquire the necessary licenses.
To help you avoid that, here are the common licenses that you need to acquire.
Certificates of Occupancy – This states that your property is set to board tenants. This certificate is also made to protect tenants and prospective renters.
A local government inspector will check that your property complies with building and zoning codes for this as well.
- Housing Business License – A housing business license is usually obtained after the Certificate of Occupancy. This is usually required for each rental unit.
The housing business license depends on what type of property is being rented. If you own a single-family home, the form is not the same as the form for a larger rental property.
Keep in mind that the certificate and licenses that you need to acquire depend on your area. That’s a note to remember if you want to know how to run a rental property business.
So be sure to check rental laws in your area to know what you need to obtain.
Know Your Role as the Landlord
To fully understand how to run a rental property, you need to know your role as the landlord.
Being a landlord is harder than you think. That’s because this will require most of your time.
If you’re a landlord, you won’t have regular work hours. Your service should be available 24/7.
Fortunately, there will be days when you don’t have anything to do. But expect that there will be days when you have a lot to do as well.
Rental laws require landlords to attend the needs of their tenants. You need to resolve any issues that arise in your property on time.
If there’s something that needs to be fixed immediately, you need to do it right away.
That’s how to run a rental property business. You have to be committed.
Failing to fulfill your duties will result in legal consequences. Your tenants could file lawsuits if you don’t fulfill your obligations as the landlord.
Learn How to Advertise Your Rental Property
To learn how to run a rental property, you need to know how to advertise it properly.
The way you market or advertise your rental property can determine your success.
Advertising properly can lessen vacancies in your property. It helps you find the next tenant to fill each vacancy faster.
Having said that, make sure that your advertisements are aimed at your preferred tenants. This saves money and effort.
You can use traditional ways of advertising a rental property like using flyers and ads in newspapers. They can still help in how to run a rental property the right way.
However, never ignore the use of online ads. They’re easy to publish and generally cheap.
Knowing how to use online ads can help with how to run a rental property properly. They can do a lot to keep your property occupied at all times.
Always post rental listings on the Internet. Doing this allows you to reach potential tenants instantly.
Also, posting ads on the Internet, particularly on social media platforms, is cheaper than the traditional way of advertising.
It’s more convenient and it helps you get tenants immediately. That’s because many people use the Internet to find what they are looking for.
There are also websites dedicated to rental listings. Landlords who want to learn how to run a rental property need to know this.
That’s why I made this list of popular websites for posting your rental listings:
Posting ads on those websites can help you find your tenants whether they are near or far from your location. That’s one way on how to run a rental property business the right way.
Additional Tips for Posting Ads
When posting ads, be sure to set the right rent. This is an important lesson in how to run a rental property.
You can check the rent rate in your area so you can charge the right amount. This is needed because the amount of your rent can determine your business’s success.
If you charge too much, there’s a chance that you won’t attract potential tenants.
People are practical in choosing rental property. It’s more likely that they’ll choose a rental property that charges reasonable rent.
On the other hand, don’t undercharge either. You might end up losing a lot of profits if you do this, and that’s not how to run a rental property properly.
Know How to Choose Tenants
You’re free to choose the tenants for your property. But you must treat all potential tenants equally.
If you want to know how to run a rental property, you need to be aware of the law called the Federal Fair Housing Act. This law was made to prevent landlords from committing any sort of discrimination when choosing tenants for a property.
According to the law, the landlords can’t decline a potential tenant’s rental application based on the following:
- Race or color,
- National origin,
- Familial status, and
Those are not only the discriminatory factors to look for. Each state has its own Fair Housing Rules.
With that said, always check rental laws in your area before you start choosing tenants. This helps you with how to run a rental property properly.
Screen Your Tenants Properly
The tenant screening process is a vital part of how to run a rental property. It helps you choose the right tenants for your property.
If you have the right tenants, they can contribute to your business’s success. There will be no late rent payments and you can ensure that the property is in good hands.
The opposite will happen if you have bad tenants. There will be late rent payments and there’s a tendency for them to cause trouble or disturbance in your rental property.
If you have bad tenants, you will have a hard time achieving success. That’s why I included the tenant screening process in this guide on how to run a rental property.
The screening process is an important factor in how to run a rental property business the right way. It will check the background and credit history of the tenant.
The result of the tenant screening process gives you an idea of how each prospective tenant will behave inside their rented property.
But before you can conduct the screening process, the potential tenant must fill and sign a rental application first.
Your rental application must inform the tenant that their information will be used for tenant screening.
Conducting the Background Check
You should get written consent from the potential tenant. They should authorize you to use their information for background and credit checks.
The tenant screening process is complex. It’s something that shouldn’t be done without experience.
The background report will give you information such as the following:
- Personal Details,
- Full Credit Score,
- Address History,
- Employment History,
- Public Records,
- Eviction Records,
- Criminal Records, and
- Fraud Indicators.
The information that you’ll get from a background report will give you an insight into the potential tenant’s personality.
Conducting a Credit Check
The tenant screening process also includes a credit check. This will give you information about the financial activities of the potential tenant for the past 7 years.
The information that you get from the credit report will give you an idea of how the potential tenant will pay the rent.
Know How to Prepare a Rental Agreement
Want to know how to run a rental property? You need to know how to make a rental agreement.
Landlords need to know how to make a rental agreement. The agreement will prevent misunderstandings during the tenancy.
You need to provide an agreement before the new tenant moves into the rented property. This is done to ensure that the tenant is aware of the terms and policies for renting your property.
That’s because the rental agreement often contains details about the tenant and the rented property. It also includes important terms and clauses for renting the property.
The rental agreement is another factor that can determine the success of how to run a rental property business.
Know the Turnover Process and Eviction
You need to know the right turnover process and eviction. This can affect how to run a rental property business.
Doing the proper turnover and eviction process helps you save money and time when getting a new tenant. It also keeps things orderly.
If you’re about to evict a tenant, always get help from a lawyer. They will assist you in removing the tenant.
Removing a tenant is easier said than done. Judges are usually in favor of the tenant since they are fighting for their home.
With that in mind, it’s vital to start the eviction process the right way. Do this by giving an eviction notice to the tenant
The eviction notice should state the reason the tenant is being evicted. Also, your notice should tell the tenant the possible solution to avoid the eviction.
After giving the notice, give your tenant some time to solve the problem that caused you to evict him in the first place.
If they ignore the notice and don’t come up with a solution, that’s when you need to start the next step of the eviction process.
Call a rental lawyer and ask for help to file a case for eviction. Prepare the necessary documents to support your claim.
If you win the case, you can then ask the tenant to vacate the rented property. If they insist, consider getting help from the authorities to remove the tenant from their rented property.
The turnover process is different from eviction. You can do this without the help of a rental lawyer.
Following the right process even here is part of how to run a rental property business properly. Fortunately, it just involves asking the tenant to leave the rented property in the condition it was when they moved in.
Final Thoughts on How to Run a Rental Property
In this blog post, I talked about how to run a rental property.
Learning how to run a rental property is easier said than done. There are a lot of complex tasks to do to keep your business running.
So how to run a rental property business properly? Start by getting the necessary licenses and permit.
After that, study your job as the landlord and learn how to advertise your property the right way.
Also, be sure to learn how to screen potential tenants. This is a huge factor in how to run a rental property business.
Lastly, know how to handle the turnover and eviction process.
If you have more questions on how to run a rental property business, leave them in the comments below.
Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this web site or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.