Basics of Property Management: Screening Potential Tenants

Tips For Renting Out Residential Properties

6 December 2019

Jesse Obrien

Rental properties can provide you with added income if you do things in a smart way. They can also be a big hassle if you are not prepared for being a landlord. Of course, you should look for homes that are ready to be moved into but do not overlook those that need a few cosmetic repairs if you are capable of doing the work yourself to save money. Before you start looking at residential properties for sale, you should consider the following tips to ensure you do not end up losing your investment

Be Prepared for a Long-term Investment

Unless you can buy the property at a very low price and do not have to put a lot of money into repairs, you are not going to make much money off renting it in the beginning. In reality, the amount you can charge for rent is going to be close to what you pay for the mortgage, insurance, and taxes. That is not taking into account any repairs that need to be done once the place is rented. When you add in the fact that the place may sit empty for a while, or between tenants, you can end up with no added income at all until the property is paid in full.

However, there is a way to speed up this process. Use any additional money from the rent to pay on the principle of the loan. You may not be able to do this every month if the place is vacant or you need to repair something, but every little bit you can pay ahead can bring big savings in interest at the end. Even taking a year or two off the mortgage means you will have all that extra income sooner.

Renew Leases

Many residential leases are for a year. About a month before the end of a lease, talk with the tenants and find out if they plan on renewing for another year or not. If they are not going to renew, start looking for new tenants. If they are going to renew, get a new lease signed. You do not want to end up with an empty house a few months down the road because there is no lease.

Be Prepared for Expenses

Unfortunately, things break and need to be repaired. You need to be sure you have some way to take care of a problem as soon as it occurs when you are renting out a property. While it might be something you would endure for a few weeks or even longer at your own home, a tenant is not going to be willing to do so. Get the work done so the tenant has no reason to withhold the rent or you will end up with a serious cash-flow problem.

For more information about uses of residential properties, speak to a professional. 

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