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Buying a Rental Property: What You Need to Know

Written by: Tenant Screening Services, LLC

If you’re buying a rental property, especially if it’s your first time, there are a few things you should know about before you move in. There are a great deal of risks, but you can manage your property stringently and get around most of them if you take the proper precautions. From performing a tenant credit check properly to tips on saving money during maintenance, we’ll guide you through the trials and tribulations of owning a rental.

Finding Good Tenants can be Hard

Messy people, irresponsible tenants and people in unfortunate circumstances. Good tenants who pay rent on time, without complaint, are hard to find. Tenant screening services will help you root out the good candidates from the bad, and you should use them as often as possible. They have a small upfront cost, but you can usually split that with the new potential tenant when he or she applies for the room/home.

A landlord credit check lets you look at the tenant’s eviction history and see debts he or she has accumulated over the years. These checks will also show criminal history, in some cases, and include a check against the Federal Terrorism Database. That will keep your home and the neighborhood a lot safer, which can help justify why you charge more to rent.

Renters can also do serious damage to your home just by using the fixtures and appliances there everyday. Everyone has heard horror stories, and they have hopefully scared you enough to put some money aside for rental repairs. If you have good tenants, show them appreciation by not raising their rent or not raising it by much. You’ll save far more trying not to price gouge.

Repairs are Unexpected

If you offer appliances with your rental property, be prepared to replace them more than once. Especially refrigerators, which can be cheap to buy but may not last long. If you have good profit margins, then these costs will most pay for themselves. Without that solid rental income, you should be prepared to spend cash up front to maintain the property and get a good cash flow going.

As long as you budget for repairs, you’ll be fine. You just need to set some cash aside to handle these unexpected emergencies.

Stick to Your Terms

The final piece of advice is to set terms in your leasing agreement and stick to them, especially when it comes to paying rent on time. Tenants who think you’re too nice will take advantage. Your best option is to set ground rules that are firm and simple to understand.
Tenant Screening Services, LLC offers landlord credit check and employment screening services that are fast, effective and safe.