Getting started as a landlord is scary. I know when I got started I had TONS of questions. When I was brand new, I had a limited landlord community and once I did have a community, I felt too self-conscious to ask questions. Since everyone in my community was so much more experienced than I was, I didn’t want to be THAT person.
That being said, you should NEVER feel alone or like you cannot ask questions. We have all been there and there is truly no such thing as a “stupid” question. Still, I understand what it’s like having all these questions and not knowing where to look, nor wanting to use your new community as “Google”. I put together this list to help you. Think of it as the ULTIMATE Landlord Google to not only answer your questions, but also provide resources and tools recommendations.
To make it easy, I have given the short answer on each question, with a link to the resources to find a much more comprehensive answer. This provides you both the “quick” answer and the more in-depth one.
Let’s Get Started
Question 1: How Early Should I List My home?
Personally, I list my house as soon as I have a date I am leaving or my tenant is moving. The thing to keep in mind is while some people will want to rent far out. Others won’t, so while it’s easier said than done, I try not to stress till we are 4 to 6 weeks out. One downside that I learned the hard way, is Zillow has a ticker. So once you post unless it’s off for 30 days or more, the ticker keeps going. So if you post it and then take it down for 3 weeks because you aren’t ready. When you have your post go live again, it will be at day 22 even though it wasn’t on the market for 21 days. This will cause a longer “days on the market” than it really was on the market. So be aware, as this burned us this past rental season.
Question 2: Should I list it at market or high market?
Personally, I like to list my house a bit high and then slowly reduce it every week or so. This way I get the absolute top value for my home as possible. Obviously, if it is rented far in advance I wait longer on the reduction than if it is less than a month away. Just be aware that you don’t wait too long or now you are running across the days on the market. Just keep in mind that once you list it on Zillow the date on the market clock starts. It doesn’t stop until the house is off the market for more than 30 days.
Question 3: Where do I list my house?
Every market is different. Some markets require Craigslist as the best and others Zillow, Trulia, Military By Owner, and Facebook. Every market is unfortunately very different. That is why when I first got started I listed my house everywhere.
Question 4: What is your Favorite Site?
Again, this is VERY market-by-market determinant. Personally, for MY markets, my two favorite places to list my houses are Zillow Manager, formally called Postlets. I also love Cozy. Both of these help reaches all the main sites in market. The best part is the populate to many sites, so by listing on 2 you are in reality listing at more than a dozen! A great time saver!
Question 5: How many places should I list my home to rent?
That is a personal choice. After tons of trial and error I have found that I list on Zillow Manager and Cozy. That is all my market requires and no need for more work than needed. Depending on your area you might want to add Craigslist and Military By Owner to your places as that is super popular.
Question 6: How do I establish price of my home?
While there are ton of calculators through Cozy, Rentometer, Zillow estimates, etc. Personally, I find the best and only way is by manually looking at it. I do this by doing it manually as discussed in 8 Tips to Establsihing Rental Price. At the end of the day, the best and only indicator is when you list your house for rent. Once it is listed, you will know by the inquiries, applicants and finally when it is rented if you established the price correctly.
Question 7: Should I take professional photographs?
Pictures are a thousand words is very true ESPECIALLY for your rental. The pictures will be the first thing that potential tenants see. It is the first step to getting potential tenants to choosing to see your house or in some cases even rent sight unseen. In the beginning, I didn’t put a lot of stock on professional photographs and some areas they aren’t needed because it is so hot. In other areas, this is the key between your house renting instantly and other areas, not.
Question 8: Should I include pest control, washer dryer, landscaping, etc?
I have found over the years that “extras” don’t necessarily mean more money. It often times means more expenses. The key to keep in mind is that there is a ceiling. For example, if people’s budget is $1700. They aren’t going to look at $1900 even if it includes landscaping, utilities, etc. The opposite is also true, that since people won’t pay more for it. By offering it, you are costing yourself money. Therefore, while I will pay more on a house for rooms or square footage, I won’t add in extras! It doesn’t add revenue and it only adds headache.
Question 9: Should I self-manage or hire a property manager?
There is NO right answer. The only WRONG answer is to make a decision because of how you feel pressured, not because it is right for your family. Five years ago my husband and I made the decision to self-manage because it was best for OUR family. It has had MANY MANY moments. I have not always made the best decision as you can see in How One Landlord and Property Manager Got Served Humble Pie. The reality is self-management is NOT the best decision for everyone. So PLEASE make the decision that works for you, as that is the only way to be successful and this is a LONG term plan not short-term. Just know that every property manager is different, so it is important to interview to find one that fits best for you and your family.
Question 10: What interview questions should I ask property managers?
The key to remember is that a property manager is YOUR representative so you want to make sure you chose one that will best fit your style. Here are 80 questions for you to think about when you are interviewing a property manager. The key is not to ask all the question, but to think about them and then ask the property manager questions that make you comfortable with them. The KEY is you have to be comfortable with the property manager, as they will be acting in your stead.
Question 11: Should I allow pets?
This is another VERY personal decision. We personally have 3 cats who are the LOVE of my life and I cannot image not being able to have them in my rental. On the other hand as a landord I know the damage that can be caused to a house by pets. So for me it is finding a good balance. The reality if done right I have found that allowing pets, get me great tenants, more interested AND more money. The key for me is having a great pet policy.
Question 12: What should I charge for my pet policy?
This is a very personal decision that is dependent on your market, local laws, and finally your personal wishes. While I love animals, and am a HUGE believer in allowing them, the reality is they cause damage and I need to sufficiently cover myself for this risk. Therefore, I charge 1 month refundable pet deposit (in addition to the security deposit) or $50 pet rent for houses from $1450 to $2100 a month.
Question 13: How do I put together Iron Clad Lease?
Note: This is my personal experience as landlord of 8 rental properties (No lawyer so ABSOLUTELY no legal advice). Personally, do not know of any written lease templates that are well written enough that I FEEL they cover all that needs to be in lease as an experienced (aka jaded landlord). I am not a lawyer so this is of course my non-legal opinion.
Here is how I put together my lease.
First- Download a state specific backbone
The first thing you want to do is get a good backbone. This is state specific and will have all the state particular legal “mumbo jumbo”. Many people use and love Ezlandlord Forms . The key is to have a backbone that is alterable. In regards to what company to use, (Ezlandlord Forms, Legal Zoom, etc) it is all about what is best for YOU. Just note that since these companies want you to purchase it again, they are not in easy to use Word formats, but in PDF. They do allow you to make changes they just must be in the system
Second: Customize the Lease
The next step is to customize the lease to YOUR house. While I offer no legal advice, just years of on the job oh shoots. I can tell you that these basic leases don’t cover my houses in a way that I am comfortable. That is why I put together 35+ addendums that cover everything in my lease. http://www.reluctantlandlord.net/everything-lease-addendum-landlords/ I add these to every state that allows it (Allows check your specific states requirements http://www.reluctantlandlord.net/security-deposit-list/)
At the end of the day, your goal with your lease is to be able to answer the question “”Who pays for X?”. You don’t want to have to negotiate on the spot (in my experience the landlord never wins, not even to discuss the hours negotiation take), you want to be able to respond to the question with, what does your lease say?
If you are just getting started you might find my book the Everything Lease Addendum: How-To for Landlords helpful when putting together your lease. Over the years, I found that a typical lease from Ezlandlordforms or another site didn’t cover all the nuances.
Question 14: Where do I find a basic lease?
There are a lot of different places to find a basic lease, Ezlandlordlordforms, Legal Zoom, etc. The number one that I see recommended the most on Military Landlord and Landlord Round Table Facebook page is Ezlandlordforms.com. It is key to keep in mind that while many basic leases are easy to use and allow you to add things as you go through the lease, the final version is PDF. The way they make money is by only giving you a PDF and making you redo it through their system for a charge.
Question 15: How do I send my lease if we are not local?
While there are many ways (mail, internet, Docusign, etc) the two major ways that I see are internet and Docusign. The first is to email the lease, have the tenant print out the lease, sign it, and then scan it back. The landlord would be the final signature, and then scan the new tenant a copy of the executed lease.
The second way is to do the lease through DocuSign. This allows both parties to electronically sign “esign”.
Question 16: Is a short-term or long-term lease better?
This is a very personal question as it really depends on your goals. The thing to keep in mind is both rent rates and also costs of short-term moves. In my experience, as the landlord of 8 rentals, tenants moving in and out causes damage. On the other hand, I found that the shorter they are there the easier it is to hold people to damage. While my parents have had the same carpet for 15 years or the short sales we bought had great 9-year-old carpet. I find tenants who stayed in the house for 3-4 years are harder on the carpet than 4, 1-year tenants.
This is the same with rent rates. Typically tenants who have been in the house for longer than shorter have cheaper rents. In addition, most people who want to rent for a 2 – 4-year term want to lock in the same rate. This isn’t a problem if rent rates stay stagnate. On the other hand, our Charleston house went from $1040 to $1400 in 2012 to 2016. So if I had signed a 4-year lease that would have been a HUGE loss in income.
On the other hand, a long-term tenant typically means less stress, no turn over costs, and no loss of rent in between tenants. That is why it is so important to look at all the costs and make a PERSONAL decision. For example, right now for ME personally, I like short term and am willing to do the work for the higher income. On the hand, I know many people that will take the lower rents for less works.
Question 17: Should I give a discount for a longer term lease?
I wouldn’t and many people actually have an increase in rent built into their lease. At a minimum, a longer-term lease is the discount in my world. As discussed above these are VERY personal decisions and really depend on your personal goals.
Question 18: Should I allow tenants to rent sight unseen?
I LOVE sight unseen tenants. As both a fellow military landlord and tenant, I understand the need to be able to rent a house because there is time you just can’t view a house, yet you want to have a house when you arrive. On the other hand, as a landlord this can be scary because you have no idea if they will like the house.
In the beginning, site unseens were the easiest but the hardest. They were easy to get the house rented, but they were the hardest the first week. They negotiated, struggled, and honestly never seemed happy. While I never regretted allowing it, I quickly realized there had to be a better method. For me that became a LONG section in my lease that covered site unseen tenants responsibilities (you can find my wording in 4 Ways to Successfully Place a Sight Unseen Tenant). That solved my problem and ended the issues. So now I allow it but require them to sign the addendum.
Question 19: Should I allow my tenants to pay their rent in one lump sum?
A question I am starting to see more often is tenants wanting to pay rent in one lump sum. As a tenant who pays her boat slip in 6-months increments, I certainly see the benefits. Unfortunately as a landlord there are thing we need to think about. For most people they record their accounts on a cash basis. That means, that you record when money comes in and when money goes out. So if you accept 12 months of rent from Nov. 1. You have 2 months of expense and 12 months of income.
Therefore I would only accept lump sum if it matched up to the expenses. I would not want more income than expenses as that is WAY too much tax liability. In addition, one needs to keep in mind is your local laws if the tenant decides to break the lease AND how your lease covers that.
Question 20: How do I renew my tenants?
There are two ways to renew your tenant. The first way is to rewrite a brand new 30 plus page lease. The second way is a simple one-page renewal notice. Which lease I use depends on my goals. If I am planning on rewording something big like break lease, deductible, etc, than I do an entire new lease. Otherwise, I do a simple renewal if it is just price and/or time.
Question 21: How do I receive money from my tenants?
There are a couple of different ways to get money from your tenants. Personally, my favorite two ways are Cozy (this is who I am slowly switching over to) and direct deposit into separate bank accounts. I LOVE Cozy because you can have all the rents come into one account but can record the number. The direct deposit into the bank account are great except when it means you have 8 plus accounts because its the only way of knowing who paid for what.
Question 22: How do I set up my rental accounts?
At a minimum, you should ALWAYS keep your rental accounts separate from your personal accounts. Many states have VERY specific rules to how the security deposit must be held. If it is not held correctly, you could owe the tenant, not because they were right but on a technicality. So make sure you look up the rules and follow them.
Once you have followed the state rules. There are a couple of different ways to set up your rental accounts. The two most common ways are either to set up one general account for all houses and use Cozy to know who pays what or one account per house. I was doing one account per house for awhile, but now am going to Cozy as 8 different accounts is WAY to complicated for me.
Question 23: Where do get a background and credit check done?
My favorite application, background and credit check company is Cozy . I am a huge believer that screening is everything, and of all the companies I have tried I think Cozy is amazing!. That is why I use them for ALL 8 of my personal homes and the 4 I manage for family.
The reason I think Cozy stands out from all the other companies is their model. They are slowly transforming into a property management software for the small landlord. This is a huge deal because most of these equivalents (Buildium) charge a monthly fee $50, and then charge a smaller fee to the tenants. Cozy is able to support so many offerings for the landlords because they charge the $40 industry standard per person and that pays for most of the features that make it so amazing for landlords.
Cozy currently offers, syndicate listings (Rental.com, etc) a rental analysis, application, credit, background, collects money and BRAND new also allows you to require rental insurance). I always have the tenants put the social security number on lease so it doesn’t matter that this is not provided to me by Cozy.
Here is an extensive article I put together on Cozy with a great guide that is over 40 pages long. It includes screen shots of all the steps both on tenant and landlord side. I hope it helps.
Question 24: Who pays for the background and credit check?
I ALWAYS charge the tenants. The reality is while you think people wouldn’t apply to a house unless they qualified and were 100% committed to the house . This is unfortunately not true. I cannot tell you how many people were super interested in my house, then never pulled the trigger for one reason or another. While this is already a pain as it is very time-consuming, it would be insult to injury to lose out on the $0 to $80 they paid. Therefore I ALWAYS charge the tenant. I LOVE Cozy.com because the tenant pays the company directly so I don’t even have to collect money.
Question 25: Should I worry about the cost?
While cost is ALWAYS something to keep in mind. I personally don’t find the $40 Cozy charges to be unreasonable and honestly have not truly had an issue with my demographic. The few push back I have the tenants would not have been a good fit. The reality is if someone is concern about $40 background check, then they are not a good fit for a $300,000 + house that has repeated small charges such as filters, lawn chemicals, etc.
Question 26: How do I read a background and credit check?
A background check is way more than just the score. You want to read the complete background check in its entirety. Here is a link to the article I wrote on How to Read the Background Check.
In my book the Ultimate Guide to Cozy, I actually pulled my credit and background check through the system and took screen shots walking you through how to read it.
Question 27: How do I handle a ton of interest?
Many people handle lots of interest on their property in two ways. One by being first come first approved complete. Others by accept applications until a specific date and then review them and pick the best applicant from the pile. While our markets are “hot” they typically don’t have 20 interested parties inquiring all in one day. Therefore we practice the first come first approved complete. If I had an over-whelming amount of interest, I would probably practice the deadline method. This way everyone has an equal opportunity and I can look over all interested applicants.
Question 28: Any tips or tricks for saving money on repairs?
As landlords you quickly learn that you spend money to make money. When you have 8 rentals you quickly learn that you spend a small fortune on repairs so you might as well maximize your savings (and earnings). I do this in a few ways. One I use credit cards to put every purchase possible. This has paid for many vacations (Fiji) and also for my old work clothes (Loft). The reality is while spending the money is not fun, the credit card points have added up and really been a great “fun money” source.
A more recent way I discovered to save money is Swagbucks. The only thing I kick myself is for not using them earlier as they are amazing. You earn money when you shop online just for going through them. This combined with mygiftcardplus (through swagbucks) means I earn extra points. For example, using this method I earn 5 points per $1 spent at Lowes and Home Depot. For example, I spent $3000 on refrigerators for 3 houses which mean I got 15,000 Swagbucks or $150 in gift cards in addition to credit card points. This is awesome because it means that my “normal” spending is going to buy future personal or business related items.
Here is a video I put together on how I use Swagbucks and MyGiftCard plus to get the maximum discount. I hope this helps.
Question 29: Should I buy a house if I am only going to be there for 3 years?
The reality is this ALL depends on the numbers and the location. I buy whenever it is cheaper to buy than rent as long as rent is going to cover the cost of my mortgage plus $200. I also take into account any major needs of the house (roof, appliances, etc). For us it about the long term paying off of the unit.
Question 30: What are some good Support Groups for Landlords?
As a crazy, jaded and crusty landlord. I am the FIRST to tell you that the ONLY way I survive this crazy world is from landlording village. They are the one that offers me support, advice and lets me learn from their lessons learned. So I don’t have to make the same mistakes. Most importantly they share their resources, something that has been amazing.
Here are my favorite support groups.
Military Landlord Facebook Group– This is an amazing Facebook group that features active duty, reserve and retired military members and their spouses. It was started by Sasha Lightfoot to provide a great community to allow us help each other in this crazy lifestyle.
Landlord Round Table Facebook Group- This is an amazing Facebook group that I started for everyone who is open to everyone who is a landlord as long as they want to share their lesson learned.
Biggerpockets– This is a huge membership from every walk of life. You have to join (its free) to join the forums. This is where I got started in 2013 and met many wonderful people. It is a HUGE group so it is important to pick out your advice but you get every walk and view of life.