When my husband and I bought our first home, we didn’t realize we bought it at the height of the market. Needless to say, our family quickly grew out of our tiny honeymoon home and needed to upgrade.
Unfortunately, we were so underwater, we couldn’t bear to sell our house at such a great loss. So we kept the little house and rented it out. Here is how we manage the property on a low budget and little start-up knowledge and experience.
Be picky choosing a tenant
Having a rental property is expensive, and it can be really financially difficult to go a month or two without having a tenant in your home. However, having a poor tenant who pays rent late, not at all, or destroys your home would be worse. Take the time to find someone good and go through due process. Charge an application fee, check credit and talk to all references. Make sure they are employed and make enough legitimate money to pay rent. It will ALL be worth less head ache in the end.
Keep track of EVERYTHING
It is absolutely crucial for tax and legal reasons to keep track of everything when renting out a property. Home improvement expensive, vehicle mileage, lease agreements and even conversations or emails with the tenants must be documented and filed. See your state and federal guidelines for what needs to be claimed on your taxes. All might be well in the beginning, but you never know what could come back and bite you when it’s move out time.
There is nothing worse for a tenant then to have flakey, unresponsive landlords. Make sure the property is up to code, and fix things promptly when they are broken. Again, keep track of all repairs costs and mileage of trips to the property and stores you bought supplies at to deduct on your taxes. Even small things like paint and brushes are a write off!
Be flexible and communicative
If you’ve had a really good tenant for over a year and they have a major life crisis that prevents them from paying rent on time, work with them. It is VERY difficult to find a tenant that not only cares for your property, but is open and honest. However, it is a very fine line between being flexible and a push-over. Make sure you document everything and clarify your terms on every breach of your lease agreement.