Accidental landlords can enjoy a substantial passive income if they follow a few basic pointers. These include understanding your leases and legal obligations, screening tenants carefully, and setting competitive rents.
If you're a homeowner in Folsom who's suddenly found yourself in charge of a rental property, without ever intending to do so, you qualify as an accidental landlord. Nowadays, an increasing number of homeowners find themselves faced with the responsibility of managing a rental property due to unforeseen circumstances like relocation or job changes.
The good news is, you're now in a position to create a profitable rental stream. Explore the essential tips for accidental landlords to help you navigate this new world with confidence.
What Is an Accidental Landlord?
Accidental landlords are people who've become landlords without intentionally investing in property for the purpose of renting it out. Unlike traditional landlords who actively seek tenants and manage properties as a primary focus, accidental landlords might be renting out their homes out of necessity due to:
- Inheriting an extra home
- Moving for work without the opportunity to sell their home
- Switching to rentals due to increased competition in the real estate sales market
As an accidental landlord, it's critical to understand your landlord responsibilities and manage your property effectively to maximize profits.
What Are Some Essential Tips for Accidental Landlords?
Transitioning from a homeowner to an accidental landlord can be challenging. These essential tips for landlords can help you make the most of your situation:
1. Set Competitive Rent
Rents aren't escalating as quickly as they have been in previous years, so don't go overboard when setting your rent. It's best to research the rental market in Folsom to set a fair but competitive rent price.
Analyze trends that affect local properties, such as neighborhood amenities and current market demand. Websites like Zillow offer detailed insights into comparable properties, including historical rent prices and vacancy rates.
Setting the right price attracts quality tenants.
2. Screen Tenants Carefully
Take the time to rigorously vet potential tenants. Screen for:
- Reliable backgrounds
- Credit scores
- Landlord references
Draft a clear lease agreement that outlines the expectations and responsibilities for both parties. Ensure it covers critical areas such as payment deadlines, property maintenance, and rules for shared spaces.
3. Stay Updated on Landlord Laws
Educate yourself about your legal obligations as a landlord in California. Understanding state and local real estate laws helps:
- Minimize risks
- Ensure compliance
- You navigate potential disputes effectively
4. Utilize Property Management Resources
Consider hiring a professional property management company. These experts manage day-to-day operations, enforce lease terms, and handle tenant communications. This investment can free up your time while maximizing your property's potential.
Help for Accidental Landlords
Becoming an accidental landlord can seem daunting, but it also presents a fantastic opportunity to generate income and expand your real estate knowledge. By understanding your landlord responsibilities and implementing the tips outlined above, you can pave the way for a successful rental property experience.
Resident Equity Management has been managing rental properties and guiding accidental landlords since 1992. We have the skills and experience to help you thrive in your new role as a landlord.
If you're ready to learn more about property management or simply have questions about your role as an accidental landlord, reach out to our team. We're here to support you!