Here at Maine Source Homes & Realty, we enjoy helping folks buy houses or multi-unit properties they ultimately plan to rent out. If you dream of leasing property to generate income, there are 5 key things you must know to get started. Let’s take a couple of minutes to go over these Landlording 101 Basics!
Know the Law
Your critical first step is to know the laws landlords must respect and abide by. Just as your property has a foundation, legal knowledge is the foundation of your rental enterprise. Be sure, therefore, that you thoroughly study and know the law. For example, there are things you cannot ask when you vet prospective clients … Fair Housing Laws that define discriminatory behavior on the part of landlords … specific legal ways you MUST handle a tenant’s security deposit … ILLIGAL ways to evict a tenant … and more.
Make Sure Contracts are Proper and Comprehensive
“Know the law” naturally segues into “make sure your contracts are proper and legal.” Your lease or rental agreement must clearly and LEGALLY define all the critical rules you and the tenant agree to. A proper contract is a solid legal document AND a helpful, practical document, detailing such critical things as how long the tenant can occupy the property … the amount of rent due each month … whether pets are allowed or prohibited … how maintenance and repairs will be handled and paid for … and much more.
Document, Document, Document!
Make sure you have all the documents you need—then use them efficiently and continually. Have all your documents and forms organized neatly, and have a clear, step-by-step, written procedure covering common situations and problems, including vacancies, repairs, etc. Keep your maintenance contacts organized neatly for easy retrieval.
Protect Yourself with Solid Insurance
In addition to standard property insurance, you should secure landlord insurance to manage and mitigate other risks. This type of insurance generally covers financial loss incurred for a variety of reasons, and can include water damage, a tenant’s death, tenants unable to pay rent due to financial hardships, and tenants who abandon the property without paying rent due.
Get and Keep Good Tenants
Most landlords will tell you that a good, reliable tenant is worth his or her weight in gold. So make sure you have a good, solid—and legal—vetting process for acquiring good tenants. This will dramatically reduce the financial risks associated with your leased property/investment—and keep you free from the terrible hassle of dealing with “the tenant from Hell.”
ABOUT MAINE SOURCE HOMES & REALTY
MAINE SOURCE HOMES & REALTY is dedicated to helping you find your perfect home-ownership solution. Whether you wish to buy, sell, or build a home, Maine Source Homes & Realty invites you to benefit from our 46 years of trustworthy experience and expertise.