What To Know Before Becoming A Landlord In San Diego: Keys To Your Rental Success

• Passive income – The primary benefit is the likelihood of earning a steady passive income with relatively little effort.
• Tax deductions – Although there are a lot of expenses related to owning a short-term or long-term rental property, there are also a lot of tax deductions that enable you to take the full advantage of your business.
• Appreciation of value – Another benefit is potential appreciation in value and building equity as you pay down your mortgage.
• Long term investment – If you maintain your real estate properly, it will continue to bring you revenues for years to come, even after the mortgage is paid.
• Work independently – Running your own business means having more control and being able to make important decisions by yourself.

• Maintenance & repairs – Not only do you have to respond to maintenance requests promptly, but you also have to deal with a lot of unexpected expenses, such as bursting pipes or crumbling roofs.
• Time commitment – This type of business can be very time-consuming. It takes a lot of time to find suitable tenants, handle emergencies, conduct repairs, perform regular inspections, and deal with legal issues.
• Managing a property – It’s more than just collecting the rent. It involves bookkeeping, accounting, advertising, customer service, legal aspects, and many, many other responsibilities.
• Legal issues – If you are planning to rent out the space, you have to adhere to all local, national and federal laws in order to ensure legal compliance andgood reputation among the renters.
• Vacancies – When your property is empty, you are losing money because you have to continue to pay all the bills, mortgage, and maintenance.

Landlord’s Obligations Before The Tenant Moves In  

Before the renter moves into the unit, there are important things you need to do in order to protect yourself, your property, your business, and your future tenants from potential risks and liabilities. Apart from getting the space prepared, you also have to prepare yourself by learning more about the laws, insurance, taxes, advertising, and similar subjects.

Establish your budget

The first step is establishing solid budget estimates. You will need to determine things like:

• ROI (return on investment),
• outgoing expenses (property repairs, mortgage, loans, taxes, utility bills, management, etc.),
• rental price,
• unexpected costs (vacancies, emergencies),
• additional costs (screening, insurance, advertising, potential legal fees, etc.)

Get familiar with landlord-tenant laws

Next, you should understand landlord-tenant laws in your area. This law includes rights, responsibilities, restrictions, and other policies for both parties (owners & renters). For instance, tenants have the right to privacy and are protected from unjust evictions and certain rent increases. On the other hand, a landlord must provide a safe and habitable unit, comply with local, state and federal Fair Housing Act, and must not discriminate based on race, color, national origin, religion, sex, familial status, and disability. You must also obtain necessary licenses and permits that may be required by law in your state.

When you know and understand the law, you can be confident that you are adhering to it and that you are protected against any legal issues. For more information on landlord-tenant laws, contact local building or housing authority or check government website.

Obtain the right insurance coverage

If you are planning to start leasing your property, it is crucial to obtain the right type of insurance coverage which will protect you against various risks typical for this industry, such as property damage, theft, vandalism, or loss of rental income. This is a wise investment for owners of all types of rental units, including vacation rentals and occasional occupancies.

Draft a lease agreement

A well written lease agreement is your strongest legal protection. It is a contract that protects your rights and your tenant’s rights and is written in compliance with local and state laws and regulations. You should thoroughly think through which policies you want to include in your lease, such as pet policy, nonpayment repercussions, and noise restrictions. For novice landlords, it is not easy to predict all of the potential issues that could arise, which is why it is advisable to consult with an attorney or experienced property manager to ensure maximum protection against financial losses.

• electrical, gas, and plumbing utilities,
• protection from criminal intrusion (locks, security systems, and appropriate lighting),
• structurally sound building,
• adequate protection from weather (roof and exterior walls),
• clean and sanitary property free from issues such as filth, debris, and rubbish,
• proper pest control (free from insects, vermin, rodents, etc.),
• no environmental hazards such as lead, asbestos, and mold

Prep the property for renters

Preparing your home for renters means making it safe and habitable. But it also means updating it in a way which will prolong its life and save you money in the long run. Although it is not easy to keep your place scuff-free forever, there are certain modifications you can do to minimize potential damage and make your space more resistant to regular wear and tear. Ultimately, these upgrades will reduce costly repairs and protect your investment.

• Install new durable flooring that’s both beautiful and easy to maintain. Check out bamboo, luxury vinyl tile (LVT), high-end laminate, faux wood. Stay away from carpets as they stain easily and have short lifespan. Protect floors from further damage by applying felt pads on all furniture legs, placing doormats, and installing shoe racks. Choose vinyl and tiles for kitchen and bathroom floors.
• Paint the walls using gloss or semi-gloss, washable paint, which will be easy to clean between tenants’ stays. Protect the walls by installing door stoppers. Screw hooks, racks, and bars into studs. It is also advisable to prohibit TV mounting in order to avoid safety risks.
• Consider replacing storm and screen doors with plexiglass – It’s cheap, strong, and durable.
• Opt for low maintenance landscaping – The less work it requires, the better. Don’t expect every tenant to tend to the yard as much as you would. Choose elements such as mulch, which prevents weeds and erosion, perennials, native plants, shrubs and automated irrigation systems.
• Highly-durable finishes for the kitchen – Renters expect to have top-notch kitchen, as kitchen is no longer a place for coking only. It’s a place to socialize with friends and family. In order to meet the demands of modern day lessees, but protect the property from high-traffic wear and tear, look into quartz countertops as they are easy to maintain and are most heat resistant. For lower end homes, choose laminate countertops as they are the most durable alternative.
• List all upkeep details in your lease agreement – Make sure the agreement includes proper conduct in and around the property, such as waste management, landscape upkeep, and maintenance.
• Final inspection – Check all appliances and household areas such as the roof, garage doors, gates, gutters, HVAC, electrical, appliances, light switches, etc. If anything is near the end of its life cycle, now is the time to replace it with the new one. Check smoke and CO2 alarms and install new batteries. Ensure all locks are functional. Assess whether there are any structural hazards (loose handrails, sagging floors, foundation cracks, damaged roof trusses, etc.) Don’t forget to check for pests and treat the home if necessary.
• Thorough and deep cleaning of the property – Consider hiring a team of professional cleaners to help you declutter and meticulously clean the space (furniture, carpets, rugs, window treatments, floors, etc.) and give your place a fresh look and smell.
• Take photos – Don’t forget to take photos as they will serve 2 purposes: You can use them for advertising and you can keep them as records of current home condition.

Advertising & price setting

Advertising your property is most effective when you are familiar with the market conditions and when you are targeting the right audience. The best marketing strategy involves a combination of different techniques and it attracts the exact type of tenant you want. When creating an ad, showcase the features that would entice reliable and loyal tenants. Take high-quality, professional photos, write impactful descriptions with catchy headlines and include all the important details about the property (price, square footage, location, amenities, recent upgrades, and distinctive features). Next, determine a fair price by analyzing similar properties in the neighborhood. Finally, choose popular platforms with high traffic to list.

Finding the right tenants

Finding good and loyal tenants can be divided into three steps:

1. The first stage includes proper advertising, market-reflective price setting, and preparing rental application paperwork. The answers on application form will help you determine whether an applicant is fit to pay the rent on time and whether they are ready to adhere with the rules you are trying to enforce.
2. After you have selected potentially suitable candidates, you can start the tenant screening process. The best way to find out whether an applicant is financially responsible is to perform a credit check which will reveal potential red flags such as substantial amount of debt, missed payments, or bankruptcy filing. Good credit is a sign that a tenant will pay rent on time and will care for the property.
3. The last stage involves accepting the tenant. After the initial walk through and documenting the condition of the property, inform your future occupants of their responsibilities, and move on to signing the lease. Make sure you answer all the questions and address all the concerns. Most importantly, you have to make sure they are clear about their rights and responsibilities.

After The Tenant Moves In

Once the tenants have moved in, your main responsibilities are to remain available for all inquiries and concerns, to collect the rent, and to maintain a habitable living space by performing on time emergency repairs and maintenance.

Rent collection

Online rent payment is the most preferred payment method for the majority of renters, meaning you should set up an online payment system to make it convenient for the occupants. However, provide other payment options as well, including cashier’s and certified checks, cash, and money orders as not all individuals have the same payment preferences.

Precautionary maintenance & regular inspections

You will have to perform occasional maintenance checks – typically twice a year, which will help you spot issues on time, and avoid possible liabilities, injuries and expensive repairs. This is an excellent opportunity to see how the tenant is treating the property and whether they follow the rules stated in the lease.

For better organization and easier tracking of all the things that need to be checked, you can refer to maintenance checklist. It is always a good idea to have a list of reliable contractors who will keep your property in top shape and clients satisfied. This list may include carpenters, electricians, plumbers, HVAC experts, general contractors, and other handypeople.

Remain approachable

Most importantly, always be available for tenants. It will keep them happy, loyal, and respectful of the premises. Ensure you always answer the phone when they call, or at least return the calls at your earliest convenience. Knowing they can reach you whenever they are in need and knowing you are addressing the issues promptly increases the likelihood of lease renewals (for long-term rentals) or repeat stays (for vacation rentals).

Seek Professional Assistance: Hire A Property Management Specialist

A property manager is a person in charge of overseeing rental properties, performing day-to-day duties,  and tending to the needs of tenants. The duties of property manager include researching potential occupants, conducting property maintenance, handling rent collection, enforcing lease agreements, and attending to tenants’ concerns. As a landlord, you are legally bound to provide a habitable space for the occupants, so if you are unable to maintain the required standards by yourself, it may be best to hire professionals, such as Swell Property agency.

Although it may be tempting to save some money and handle all responsibilities by yourself, in certain circumstances it may be a wise choice to hire professionals:

• You don’t live far from your property.
• You own multiple properties.
• You are not comfortable with active participation.
• You lack time.
• Manager fees are within your budget.
• You are not familiar with laws and regulations.
• You don’t have enough experience.

How To Become A Successful Landlord

You can expect a lot of difficulties and a steep learning curve, but don’t get discouraged. If you are dedicated, open to learning, and up-to-date with best industry’s strategies, you can become a good landlord and succeed in this business.

Get started with these practical tips to start off on the right foot:

• Run your rental like a business, not a hobby or side job – take it seriously and don’t get overly emotionally attached
• Nurture clear communication, positive people skills and great customer service
• Enforce and follow rules in your lease
• Remain reliable and trustworthy in dealing with tenants
• Timely respond to maintenance and emergency requests
• Be professional and respectful of their privacy – provide proper notice before entering
• Be considerate and mindful of your residents’ concerns and needs
• Utilize services from reliable maintenance and cleaning vendors and contractors
• Know the basics of accounting, financials, and legal matters
• Be knowledgeable about digital technologies

Becoming A Landlord Does Not Have To Be Complicated – Find Out How!

Now that you know what being a landlord entails, you can decide whether it’s something you can pursue or not. The decision to rent your property is huge, and to succeed in this business, you must thoroughly prepare both yourself and your property. Thes preparation includes learning, improving skills, hands-on work, and administrative duties. If all these responsibilities are not something you are comfortable with, hire a professional company which will perform all the daily tasks for you. This way, you will save a significant amount of time while providing stellar service and earning a great reputation worthy of 5-star reviews. To learn more about our Swell Property management services, fill out the form or call us at (760)452 – 2345.