Working as a landlord or property manager could be a gratifying experience. However, if you never worked in this role before, there are a few things that you’re going to want to know. Below, you’ll find a few tips and pointers that could benefit first-time landlords.
Rent Always Comes First
Landlords should always be aggressive when pursuing rent. Unfortunately, this is a mistake that first-land landlords in San Francisco seem to make too often. Rent in a significant source of revenue. First-time landlords should not only go after rent but late charges as well.
That’s not to say that you can’t have the flexibility to work with tenants who need assistance. However, the tenants should communicate this with you first. So long as they reach out to you, compassion and understanding are ok. But if tenants stop paying rent and ignore your notices, you may need to take legal action.
Similarly, you could also make it easy for tenants to pay rent by offering an online collection service. This not only is convenient for tenants, but it could help you as well, as you won’t have to worry about a check bouncing. There are numerous platforms to help you collect rent online.
Take Time To Review Potential Tenants
As a landlord, you can screen the tenants who will live in your building. This is something of which you should take advantage. When it comes to renting, anything less than a credit score of 600 is “bad.” You should proceed with extreme caution when dealing with tenants like these. A brief breakdown of credit criteria is as follows:
•600 or below – Extremely poor
•600 to 649 – Poor
•650 – 699 – Mediocre
•700 to 749 – Good
•750 or higher – Excellent
Think Of Ways To Make Extra Income
Rent does not necessarily have to be your only source of income. Too many first-time landlords think 1:1, meaning that all they do is buy a property and rent it to tenants. However, as a property owner and manager, there are other opportunities for you to make money. Investing correctly could not only earn you additional income, but it could also increase the building’s value as well.
For instance, an excellent example of this is the use of solar panels. Installing solar panels on your roof will help cut the cost of utilities. It will also allow you to sell excess energy back to the grid. This transaction will not impact your tenants, but it will help pad your pockets with cash. Consider thinking outside the box about how your unit could help earn you money.
Renovations Should Be Worth It
When renovating a unit, you should consider whether doing so will help earn you more money. For instance, if you purchase a building in a “C+ neighborhood,” there is no need for you to perform “A+ renovations.” That’s because prime tenants won’t want to move to the neighborhood, so you won’t be able to increase rent. You’ll have sunk a ton of money into renovations that are effectively worthless.