How to Buy Your First Long Term Rental | Owning, Advertising, and Everything in Between!
Ready to get into real estate investing and considering Long Term Rentals? Purchasing single family homes and multi-family units are a great way to jump in and create a lasting and long term income producing asset, with a fast learning curve and we are here to give you the full scoop–from the pros and cons, to finding and retaining tenants, and everything in between!
Owning a Long Term Rental, Pros and Cons:
Pros
Consistent income
Easy management
Tenants pay utilities
Clean slate
Tax write-offs
Lower management costs
Cons
Tenant laws
DIY landlording takes time
Potential damage
Property Management:
DIY
You’re in control
Save money
Systems
Learning
Connection
Property Manager
Fewer worries
No emotional involvement
No skills needed
Expert skills
Time vs. Money
Allowing Pets in You Rental Units:
Pros
Larger renter pool
Pet damage deposit
Charge more
References
Restrictions
Accommodation
Cons
Potential damage
Odor/allergies
Waste
Noise/neighbors
Advertising Your Rental:
You know the market rate for your rental, so now it’s time to write your rental ad and post it for rent!
Zillow - Zillow is by far the easiest and broadest-reaching tool to post your rental
Craigslist - Free postings, but can be somewhat spammy.
Nextdoor - This can be a great way to advertise your rental to your immediate community.
Apartments.com - Free postings and ability to manage leases.
Attracting and Retaining Great Tenants:
You’ve posted your rental and now it’s time to find (great) tenants! Some tips:
Kind gestures - consider a welcome gift or list of local hotspots for your tenants.
Flexibility - offer flexible lease duration that matches your potential tenant’s needs.
Maintain the small stuff - take care of maintenance requests ASAP.
Respect privacy - always give ample and required notice before entering the property.
Lease and Rental Management:
You got a strong response to your ad and found some great tenants! Now you need a lease.
MultifamilyNW - Oregon rental forms that comply with updated laws and requirements.
Stevens Ness Law Forms - Local Portland law firm that publishes all types of legal forms, including leases that comply with updates laws and requirements.
Apartments.com - Excellent way to screen tenants and manage your rentals online, FREE for landlords!
Zillow Rental Manager - Post rental, screen tenants, e-sign leases, and collect rent online through Zillow.
Lease Considerations:
Expectations - Clarify as much as possible in your lease.
Painting - Tenants want to make a place feel like their own.
Short Term Rentals - Clarify if you allow your tenants to rent out a portion of the home as a short-term rental.
Sublease - Decide if you wish to allow this, or if you will consider it on a case-by-case basis.
Example damage costs - Give them examples.
Move In:
Lease is signed and your tenants are ready to move in! Now it’s time to do the following:
Take photos and videos
Move-in inspection
Collect deposit(s)
Key handover
Move Out:
Your tenants loved living at the home, but are ready to make a move. Here’s what you’ll want to do:
Acknowledge notice
Move-out inspection
Key handover
Return deposit(s)
Common Pitfalls for new rental owners:
Accepting late payments - If you accept more than two late payments in a row, that sets a precedent and your due date automatically changes.
Expecting too much - If it was your residence before you rented it, let go of the emotional connection. Tenants will never take care of it like you would, especially the yard.
Screening - Make sure you screen every prospective tenant over 18 that will live in the house. No exceptions.
Boilerplate leases - Spend the $20 to get an up-to-date lease that reflects the laws of your area. READ IT and be able to explain it to your tenants. Know what constitutes a violation of your lease - this is important.
Account for expenses - Vacancy happens, plan for it. Budget for repairs and maintenance every year.
Resources and Tools:
MultifamilyNW - Oregon rental forms that comply with updated laws and requirements. Digital and and paper forms available. Excellent local resource for DIY landlords.
Apartments.com - Excellent way to screen tenants and manage your rentals online for FREE! Tenants pay $30 for screening and once accepted, you can set up the lease in their system. Online rent payments
Zillow Rental Manager - Post rental, screen tenants, e-sign leases, and collect rent online through Zillow. A one-stop-shop for the DIY landlord.
Landlordology - a great website with informative articles about being a DIY landlord.
Local landlording resources - Many areas have local networking clubs or monthly landlord education classes. Spend some time researching in your area!