In Part 4 of how to get started in Baton Rouge Property Investing, I wanted to pass on some ideas and tips on managing your rental home after you’ve made the purchase.
One of the first things you will want to do is to find a tenant to live in your rental home and start having those monthly rent checks come rolling in. Before that happens you will want to establish a tenant evaluation process. Common practices in the business include having prospective tenants fill out an application which is a good first step. You may want to take it a step further by getting a credit report, background check, criminal records and eviction records. This sounds like it is too much work but web services like TransUnion’s My Smart Move make it very easy. It’s a one stop shop for all of the information I mentioned above plus the tenant prospect can pay online directly to TransUnion with a credit card and you receive an email when the report is ready. You will definitely want to brush up on the Fair Housing Laws so you can be fair to applicants and stay out of trouble with the law.
When you find a suitable tenant it is a good idea to walk through the house with them and
note any issues with the property and you both should sign it, maybe even taking pictures would be helpful. What you are doing is establishing a record of the condition of the property when the tenant moves in and when they move out so there are fewer disagreements when the tenant moves out and items need repair.
You will also want to set up regular inspections of the property to make sure your tenants are not doing things they may harm your property or cause you to have major repairs in the future. Usually two to three times per year would be sufficient.
Home warranties can also play a role in helping you pay for large unexpected repairs. You do not want to let repairs go unmade because if you do not take care of your property you can’t reasonably expect a tenant to. If repairs are not made, in time your property will not rent for as much and that will cost you money in the long run. Please make sure you read the fine print before you buy one. In my opinion, home warranties sometimes get a bad reputation because the buyer did not know what was covered and what was excluded.
In the fifth and final part of this series on Baton Rouge property investing I will discuss some of the methods of financing residential homes purchased for investment purposes.
If you have any questions, please contact me at firstname.lastname@example.org .