Even though real estate can be a very profitable venture, like every major investment, it also carries some risks. It’s great to be optimistic, but you can’t neglect the importance of preparing for any eventuality.
As you step into the challenging world of real investment and become a landlord, you need to become know and familiarise yourself with some best practices to reduce any uncertainties and ensure you’re protected as a landlord.
Here are some key things you should note.
Prepare a Tenancy Contract
A tenancy agreement r agreement is an excellent way of preserving your claims as well as properties. The contract should cover all terms and conditions agreed upon by the landlord and the tenant. It should include the lifespan of the tenancy and the required period of notice to be provided before eviction.
Thoroughly Vet Prospective Tenants
You can avoid most of the issues faced by landlords by making sure you use a thorough vetting system for prospective tenants. Consider requesting credit records or talking to current employers.
It might feel like you’re going overboard, but your paranoia could save you some trouble by helping you select the right tenants. You can’t anticipate a tenant falling victim to layoffs, but knowledge of their job security can be crucial. This information helps you consider a wide range of factors before picking a tenant.
Use the Direct Deposit Method for Collecting Rent
Overdue rent is arguably one of the prominent issues faced by landlords. As a landlord, life is far more peaceful if you can avoid accumulating unpaid rent. When your tenants use the direct deposit method, they are more likely to meet their payment dates.
You could also create a web portal for your tenants to use for payment. That ensures that the transaction is more comfortable for the tenants since they don’t need to write cheques, address envelopes, or buy stamps.
Insurance is a powerful weapon to include in your arsenal. It can be disastrous not to have the necessary funds if tragedy strikes. Several types of insurance give a landlord different ranges of cover. Try to get a cover that carries a rent guarantee. That way, you always get your payment even when the tenant doesn’t pay.
Regardless of whether or not you have good tenants, things could still go awry. Choose comprehensive landlord insurance to defend your investment with additional options, for instance, when a building becomes unliveable as a result of damage.
Your insurance must include buildings insurance to cover damages and costs incurred for repairs. Others include a content cover for restoring any spoilt fixtures throughout the tenancy, and liability security if a guest is hurt while on the property.
Health and Safety
You must adhere to the regulations attached to fittings, electricity, fire, and gas fixtures. Routine inspections and adequate record-keeping can make a sizeable difference when it comes to protecting your tenants and visitors to the property. You must also make sure that property is fit for human habitation and that you are prompt in dealing with any problems that are reported to you.
These are just a few of the ways that you can ensure you are protecting yourself as a first-time landlord. As you begin to take on more and more properties, you will start to learn more about the industry and the dos and don’ts.