Shifting from property dweller to property investor is a huge step. The reasons are oftentimes due to certain life changes like relocation or wanting financial freedom. Usually, first-time landlords decide to rent out their own home. We prepared below a list of things you will need to do to make a successful transition from being a homeowner to landlord.
Rethink your relationship to the property
The first step in making the shift from homeowner to landlord is to break your emotional attachment to your home. You can think of it like your child finally all grown up, getting married and starting their own family. If you want it to appeal to buyers, you will have to depersonalize your property–choosing neutral colors for the walls, floor or carpet. Remove all personal items to make way for new people to make it feel like their own.
Adjust Your Insurance
You will also need to switch your current standard homeowner’s policy to rental home insurance, often called a landlord’s policy. This covers any property damage, liability costs, and loss of rental income. However, it doesn’t cover furnishings, possessions and the like—as these become the responsibility of tenants, who can then get renter’s insurance to protect any possessions they bring onto your property. Talk to your insurance agent about changing from a homeowner’s policy to a landlord policy.
Be Prepared for Repairs and Maintenance
We often receive phone calls from self-managing landlords who simply have let their home slip from good condition to average, or even below-average condition. Reasons range from disputes with the tenant, inability to get access or just plain neglect. Issues such as mold, bedbugs, and other types of deferred maintenance are lawsuits waiting to happen. Take maintenance and repair requests.
Finding the right tenant
This is probably the most daunting task for new landlords. We are fortunate to be living in a time where we are equipped with tools to make this easier such as promoting your rental online. Another challenge is screening the tenants and finalizing the contract. First-time landlords are advised to get help from a real estate professional especially with regards to screening and lease agreement to prevent any mishap along the way.
Think Like a Pro
Congratulations, you’re now in the real estate business! Think of yourself as a business now that you’ve made the shift from homeowner to landlord — even if you hire a property manager to help you take care of your home. Like any other business, you will need to have a good system of keeping records, paying taxes right, and establishing a professional relationship with your tenants.
With preparation and planning, making this major shift can be easier. You are free to contact our team at Broadpoint Properties if you need assistance in making this #GreatMove; our team of professional property managers is available to assist you. Also, check out our blog; it is packed with tips for landlords so feel free to browse away.