Tips For Becoming a More Savvy Landlord

Becoming a landlord is a great way to build a solid income, prepare for your retirement and generate the money you want to enjoy the freedom that comes with a successful RE investor’s lifestyle. But there are some things you need to know to make it work.

Following these tips can help you develop a more savvy mindset and better know how to handle your properties so they earn you the most money and cost you the least amount of hassle and expense.

Start with solid background and financial screening. This is one of the most important things you can do to keep your REI properties in good shape, get your rents on time and know that you have quality tenants living in your rentals.

Run a credit report yourself. Never rely on a credit report given you by an applicant. Some shady tenants have been known to doctor their credit reports to make themselves look good on paper. It’s your job to look beyond the surface and discover the real condition of a prospective tenant’s creditworthiness.

By requiring a potential tenant to complete an application form that includes a social security number and signature granting permission to run background and credit checks, landlords can access a variety of valuable reports for a nominal fee. Independent organizations can provide credit checks, criminal record searches or eviction searches for minimal fees. If you’re concerned about the cost of such reports, it’s acceptable to charge applicants a fee to cover the costs which may or may not be refunded upon acceptance.

In addition to background screening, always check the landlord references of prospective tenants. And ask for a minimum of two landlord references. Experienced REI property owners have found that current landlords will often give a glowing report for a tenant just to help them find another place to live.

If you’re still unsure, ask for a current bank statement. It’s a sure way to see what the real financial worth of a potential tenant is. And it’s about the best way there is to ensure the money is truly in the bank to cover the check you receive for the deposit and first month’s rent.

Getting a photo ID is a good safeguard. This can help in the event a tenant skips out owing you a large amount of money or after writing a series of bad checks, which is a criminal act. Another way to protect yourself is to spend the small amount required to have your local sheriff’s department run a criminal check. Especially if the tenant has lived in the area for any length of time.

Be prepared with plenty of insurance on your REI property as well. People tend to be “sue happy” if something should happen. Whether it’s your fault, as a landlord, or not. It’s better to be safe and have too much insurance (if that’s possible) than not enough.

Becoming a REI professional carries some risks. But protecting yourself against them, to the best of your ability, can be done. All it requires is some planning and forethought. Put some simple policies in place and learn from your mistakes and those that others make. Before you know it, you’ll be a much more savvy landlord. Which will make the job much more enjoyable as well.