Starting out as a Denver landlord is a scary experience and can leave you with plenty of questions on how to best go about it.
Well, fear not. Navigating these issues can seem complex and confusing at first, but becoming a landlord is more straightforward than it may appear.
If you are ready to learn, we’ve put together a list of 9 tips for first-time landlords.
How to be a Great Landlord
Advice #1: Treat it like a business
Being a landlord is not a hobby. It’s a business. Treat it as such.
The rent that you collect from your tenants is your income. And, all other expenses, such as taxes, repairs, and property management fees are all your responsibility.
Also, keep your emotions out of the business. In general, decisions based on emotions tend to be irrational compared to ones based on fact and reason.
Advice #2: Decide on renovations that increase the rent
As a first time landlord, do you want quality tenants and better rent? If so, you need to invest in quality renovations.
Flooring is one thing that tenants often focus on when prospecting for a new place to rent. So, if you are renting out your property for the first time, you will want to focus on clean, durable flooring that can make your rental feel clean and modern.
Aside from updating your flooring, renters also pay attention to paint. It’s amazing what a fresh coat of paint does to a home. Not only does it visually brighten a room, but it can also give a new design perspective to your artwork, accessories, furniture and other elements in the rental property.
Choosing the proper paint color is key. When it comes to rental properties, neutral paint colors work best.
Advice #3: Get landlord insurance
An important piece of advice for landlords is when you become a landlord you need landlord insurance; homeowner’s insurance will not cover your business investment. Landlords’ insurance usually covers a property owner from financial losses connected with rental properties.
Landlord insurance costs a bit more but can help cover missing rental income when a property is vacant. On top of that, the coverage usually includes the same type of protection as your usual house insurance. This includes dwelling coverage to protect your property in the event of a range of circumstances.
Advice #4: Consider a cash for keys option, instead of an eviction
When your renter won’t leave, a formal eviction process is sometimes necessary. You can evict a renter for reasons such as:
- Nonpayment of rent
- Failing to move out at the end of the lease
- Engaging in criminal activities within the property
- Refusing to abide by terms of the lease
Now, tenant evictions can be lengthy, expensive, time-consuming and stressful. Luckily, landlords in Denver have alternatives. One rental tip is offering tenants cash for keys.
This method involves giving the tenant some money in exchange for them moving out of the premises.
Advice #5: Screen tenants thoroughly
Tenant screening can be one of the most time-consuming aspects of being a landlord. Collecting rental applications, running background checks, and checking references from prospective tenants can easily eat up a weekend.
Be that as it may, it is an essential process that you should always do prior to renting your investment property or house. Done properly, tenant screening ensures you have responsible tenants who pay on time and take care of your property.
Advice #6: Familiarize yourself with Fair Housing Rules
Discriminating against renter is illegal in Denver. According to the Fair Housing Rules, there should be no discrimination against tenants based on certain protected classes. Such classes include race, color, nationality, sex, familial status, disability, gender, religion, and sexual orientation.
As such, when you screen tenants, avoid asking them questions such as:
- Are you married?
- Do you have children?
- Are you disabled?
- What is your first language?
- Are you white or Hispanic?
Advice #7: Require renter’s insurance
Many tenants mistakenly think that their possessions are covered by their landlord’s insurance. This is far from the truth. Landlord’s insurance only covers the building. The renter is ultimately responsible for insuring themselves and their personal belongings.
Fires, break-ins, and damage are all possibilities, and tenants will bear the financial burden of replacing their furniture, and accessories. By requiring your renters to get renters insurance, you’ll avoid the sticky situation of dealing with upset tenants.
Policies differ, and a specific coverage may be required for flooding, earthquakes, and other natural disasters.
Advice #8: Add a pet clause to your rental agreement
According to the 2017-2018 National Pet Owners Survey conducted by the American Pet Products Association (APPA), 68% of U.S. households, or about 85 million families, own a pet.
Evidently, the idea of pet ownership remains firmly embedded in the American psyche.
So if you are going to allow pets in your property, ensure that you add a pet clause to your rental agreement. The clause should state if there are any breed restrictions. It should also state what type of pets are acceptable.
The clause also needs to indicate the number of pet fees/deposit, if any.
Advice #9: Schedule regular property inspections
If we can give you any landlord tips, it’s to conduct regular inspections. Regular inspections help combat any signs of damage early on and help to avoid any nasty surprises at the end of the tenancy.
When conducting a rental property inspection, ensure that you give your tenant adequate notice. Why? Denver tenants have a right to quiet enjoyment of their homes. That means that even if you are the property owner, you can’t barge in on your tenants whenever you like.
Becoming a landlord has its sets of challenges. But, it’s also an excellent way to build wealth. Hopefully, these 9 pieces of landlord advice can help make the journey an easier one.