First Time Landlords: Key StepsOK, let's get the disclaimers out of the way.
1) I'm not an attorney, and this should be construed as helpful, but not legal, advice.
2) It's targeted at Landlords in Massachusetts. Laws in other states may differ significantly.
OK. So here we go:
Vacancy Is the EnemyMarket your property slightly below market and get it rented fast. Better to have less than maximum income than no income at all. Raise the rent to market rates when the lease is up.
How do I find GREAT tenantsEvery new landlord has very high tenant expectations. I'm only going to take great credit! No smokers! No pets! Not to burst your bubble, but most of those folks don't rent. They own. So let's bring down the expectation level a bit. The key is to find someone who will A) Pay you B) Take good care of your property. Those two are hard enough. Here are some tips.
1) Income is more important than credit. Always look at the credit score, but go deeper. Find out why the credit may have non-payment history. Sometimes, it's a recent divorce, or job loss, but now your tenant is on the mend, and will resume their previous good payment history. A score doesn't define a tenants life - so
|Each New Tenant is A Risk:|
Work Hard to Minimize It
2) Double check everything with the self-employed. It's very hard to validate income of the self-employed. But you must.
3) Be wary of anyone offering to pay you several months in advance. People with regular income streams don't need to do this.
4) Learn what you can about them - and call past landlords where possible. Find out why they are moving, and ask the old landlord if they were tough on the house.
No matter how much you scrutinize, there are no guarantees with tenants. If you can't handle that uncertainty, you should probably not be a landlord for very long.