The Landlord Of The Future - Education
It all starts with the education process. Many potential landlords believe if they own property they can easily rent it to others and that's the end of it. The belief that simply placing a sign on the lawn and taking cash from the first person who wants the unit is idealistic and has the potential to cause great harm for both the landlord and the tenant.
This idealistic approach often stems from the need to have a property rented at all times. Rental property owners who fall into this category have not prepared themselves well enough financially. Not having enough available funds to cover the operating costs of owning a rental property, forces an owner into accepting the first "cash on hand" available renter that comes along.
In financial and investment terms, this is called the Vacancy Ratio. Vacancy ratio is the amount of time that a unit is vacant in relation to the amount of time a unit is rented. The idealistic property owner believes they must have a Vacancy Ratio of 0% to be profitable.
However, this is in fact not true. If a unit has a vacancy ratio of 0%, chances are that potential income from this property is not as profitable as it may be. Units with a 0% vacancy ratio are typically priced well below the rental market for that area.
By pricing a rental unit properly, property owners can not only achieve high profit margins, but may also obtain more quality long term renters. This then translates into more profit and happier, satisfied landlords. A happy landlord = happy tenants!
Duties and Responsibilities
All potential landlords must begin the process by educating themselves regarding Landlord tenant laws for their location. This process includes obtaining information on the duties and responsibilities of the landlord, tenant evictions, collections of rent and legal notices and processes.
As we mentioned, the 'idealistic' method of obtaining a tenant can cause great harm. Not only physically to a property, but also to a landlords state of mind regarding tenants.
Landlords have both duties and responsibilities to tenants. These duties and responsibilities vary by state, so it is prudent that all potential landlords research this information in depth. Learn it, live it and apply it!
Knowing your obligations as a landlord will not only make you a more informed property owner, but will also save you time, trouble and money.
Evictions, collections and legal processes
Many municipalities offer landlords booklets or pamphlets on the necessary forms for collecting past due rents, evictions and guidance through the legal process of both.
It is imperative that landlords follow the law when faced with an undesirable situation. Not doing so may result in additional costs to the landlord in the form of attorney fees, property repairs as well as other soft costs.
The next article in this series will cover tenant screening, background and credit checks.
Summary
Being a successful landlord requires education, diligence and responsibility.
Responsibility starts with educating yourself so that you can offer valued services to your tenants which in turn may help provide your investment with profitability.
Your duties are not only to yourself, but also your tenants which in return should provide you with quality long term tenants. Landlord tenant attorney.