Investing in real estate has proven to be a wealth building strategy throughout history. In fact, the market for rental housing has continued to grow recently as people opt to rent for many different reasons, including the need to be free to relocate quickly, the desire for a low-maintenance lifestyle, or the lack of sufficient income or credit with which to buy a home. No matter what the reason for renting, recent statistics show that more than forty percent of the population in the United States are now opting to rent their home. With numbers like these, new real estate investors can feel confident that the ownership of well-managed rental property will remain an excellent wealth building tool for many years to come.
What new investors should know about being a good landlord
Building trust with the tenants in your properties by keeping them in good repair and dealing with safety issues in a timely manner is extremely helpful when landlords want to build trust with the tenants living in their properties. But in order to make sure that real estate investing remains profitable, new investors also must find effective ways to:
- use good screening procedures to make sure that only reliable tenants with adequate income and good rental histories are selected
- employ one or more reliable contractors to respond to emergency repair calls and handle necessary maintenance
- follow all current Fair Housing laws to make sure that all applicants are treated fairly, without being subjected to discrimination issues of any type
- develop and use a good inspection process whenever tenants move into or out of a rental home or unit
- use lease contracts that conform with all applicable leasing laws and regulations on local, state, and federal levels
- develop a reward system to encourage positive tenant behaviors, such as offering a small discount for rental payments that are made early or on time or offering rental credits or gift cards for referring good tenant prospects when vacancies occur
- offering tenants a way to make rental payments electronically from their computer or smart phone
- offering an answering service to make sure that tenants can always reach help in case of an emergency situation or after-hours repair issue
- charging late fees when tenants are late in paying rent (adding a one-time waiver for this policy may be a good idea to ensure that tenants are not charged for a situation that is not their fault, such as bad weather or a health emergency)
Attending to all these issues can take up much of an investor's time. Because of this, many investors opt to use reliable property management services offered through a local real estate brokerage. In most cases, property management services such as these are a low-cost way to make owning investment property more profitable while allowing the new investor to remain focused on acquiring new investment properties instead of spending hours every day managing them.