6 Things Every New Landlord Should Know
Why Great Landlords Think For The Long-Term
With the purchase of your first rental property, you’re not just a homeowner, you’re an entrepreneur. And just like any skilled entrepreneur, your goal should be to manage your business in a way that adds value to it. After all, you’re not going to own it forever.
Here are six tips we got from current landlords that can save first-time landlords a lot of headaches!
1. Understand that the inspector won’t find everything
“Contingent upon inspection” is a familiar term to anyone purchasing property. You pay the inspector to examine your prospective purchase with an eagle eye, looking for problems, both big and small, that are likely to cause you pain and cost you money. Once that’s done, you can be pretty sure you know what you’re in for, right? Wrong. Your inspector won’t find everything, so do your own homework, ask lots of questions, and don’t let impatience get the better of you. A good, thoughtful inspection will save you a ton of time and money in the long run.
2. Try to build a good relationship with the previous owner
This isn’t always possible, of course, but a former owner is a great source of information on your property. When was the roof last replaced? How was that foundation repair made? What company did you use for garbage pickup? If you feel uncomfortable with this kind of relationship, do yourself a favor and at least get a list of the names and numbers of trusted contractors used by the previous owners.
3. Have your contractors ready
Before buying the property, line up a good plumber, electrician, carpenter, HVAC specialist, general handyman —you’re probably going to need them all at some point. And it is incredibly important to know who to call before you’re in dire straits.
4. Keep existing tenants if possible
Existing tenants have historical knowledge of the property that you lack as a new owner — knowledge that you may find useful. You must of course undertake the necessary background checks, but if your proposed property has good, long-term tenants, you may want to consider keep them on board. If it ain’t broke…
5. Don’t cheap out on repairs
Buy quality fixtures, don’t go super cheap on appliances, and hire licensed contractors. (Sure, your cousin Joe says he’d be happy to do that rewiring for you but, no. Just no.) There’s nothing more expensive than a cheap repair, and you’ll ultimately end up paying more for ‘discount’ services
6. Be proactive with improvements
Once you reach the positive cash flow, it’s time to be proactive. Do you need new windows, a fresh coat of exterior paint, landscaping, a new hot water heater or furnace? Take care of these things before they become problems and you will not only save yourself a lot of stress, but you’ll send a message to your tenants that you’re on top of things and interested in keeping them safe and comfortable.