Getting Started as a Landlord - Part two

In Part One of this series, we discussed the various types of rentals as well as, the pros and cons of being a landlord.  In this part, we will discuss the importance of Zoning laws, preparing your rental for tenants, and whether hiring a property management company is the best way to go.

Zoning Laws

Zoning laws can have a significant impact on a landlord and their rental property.  In a nutshell, zoning laws keep residential and commercial areas separate from each other, so residents aren't living in the middle of a noisy industrial area.

Before purchasing a property, it's important to investigate your local zoning laws to see whether or not they will affect your rental property.  An area zoned for one type of land use may later be changed, so be aware of future developments that could affect your property.  for example, property in a residential area might be changed from one zone class to another, due to factors such as sprawling, which could impact your property value and your ability to find tenants.

Preparing your Rental Property for Tenants

Once you have chosen to rent your property, you must take steps to prepare it for tenants.  The condition of your rental will affect whether or not it's ready for occupancy.  

In order to remain competitive, you'll need to make your rental unit appealing to tenants.  this should include fixing any known problems, complying with your local zoning laws, and upgrading the property to make it more enticing, comfortable, or aesthetically pleasing.

From the foundation to the roof, check to make sure everything is working and that your property meets municipal and state housing codes.  It's better to tackle renovations before a tenant moves in, both for safety reasons and to avoid coordinating improvements around their schedule.

Below is a list of thing you should do to get your property rent-ready:

• Check all appliances to make sure they work, including the oven, dishwasher and washer/dryer, if applicable.
• Test smoke detectors and CO2 detectors.
• Repair any problems, such as holes, water leaks, pests, etc.
• Give the walls a facelift with a fresh coat of paint.
• Replace or clean flooring
• Upgrade fixtures and/or window treatments.
• Clean each room thoroughly, including hard to reach areas such as cabinets, vents, and other storage areas.
• If you have porches, decks, steps or stairs in the unit, ensure they are strong and safe to use.
• Ensure that all exterior doors, gates, and windows have working locks.
• Eliminate any bad odors
• Landscape front and back yards.

Above all, the rental property must be safe for a tenant.  If you are renting a basement suite, you must adhere to specific safety regulations.  For more information about setting up a secondary suite, contact your local municipality.

Insurance

Insuring a home you live in is different from insuring a property you use for rental purposes.  As a landlord, you may already have homeowners insurance on your rental.  While this may provide some protection, a landlord insurance policy may be more aligned with your needs as it may offer coverage for liability on the property or damage by the tenant.  Contact your insurance provider to ensure you are getting the correct coverage for your property and that it's classified as a rental.

Should I Hire a Property Manager?

By now it's clear that managing a rental property can be hard work.  You must be available to your tenants in case of any problems or emergencies, as well as take care of the day-to-day landlord tasks, such as collecting rent and paying property bills.  Most new landlords also work another 40+ hour a week job.  Doing both can quickly become overwhelming.  Toilets and air conditioners don't always break and basements don't always flood during normal business hours.  This means that, as a landlord, you will need to get up out of bed or leave your families holiday gathering early so you can get these things repaired before you go to your day job.  

Here are a few other reasons you might want to consider hiring a property manager:

• You live far away from your rental property
• You're not interested in managing a rental property
• You don't have enough experience to successfully manage the property.  In that case, a property manager can help ensure you are renting legally.

So....What is a Property Manager?

A property manager is an individual or firm who is hired to oversee and manage a rental property and its tenants.  They are actively involved with the property and perform such tasks as:

• Screening tenants and negotiating lease terms
• Discussing leasing and property rules with a tenant
• Collecting rent or other fees
• Arranging for repairs, maintenance, and upkeep
• Paying bills, assisting with taxes, and managing a budget.
• Enforcing rental rules and policies.
• Setting rental rates and advertising the property.
• Issuing notices
• Handling move-in and move-out inspections.
• Record keeping.

A property manager handles all fo these responsibilities and more.  They do charge a fee for their services, but depending on your availability, it can be worth the money to avoid daily landlord duties.  Whether you choose to hire a property manager will depend on your financial situation and the amount of time you can dedicate to managing your rental.

Although a property manager might not be feasible if you are only renting out one property, landlords with several rental properties find them useful for shouldering a large portion of the responsibility.

Our next installment will cover the subjects of how to find tenants, how to screen them, and what to do once you've found one.