Are you thinking about renting out a property in San Jose or anywhere else in Santa Clara County?
For most property owners, that’s a good decision. Renting out a home can be an excellent opportunity for anyone who wants to earn some consistent rental income while their asset grows in value. In this market it’s especially lucrative. Rents are rising, and the demand for well-maintained rental homes in good locations is high.
That doesn’t mean it’s going to be easy.
Being a landlord requires effort and time. It also involves more than just a little risk.
If you’re deciding whether or not to rent out your property, think about whether you’re ready to become a landlord. If, after reading this blog, you decide you’re not quite ready, that doesn’t mean you can’t rent out your home. It simply means you need to lead on the experience and qualifications of a local property management expert.
Let’s see where you land in terms of being a good landlord. Think about whether all of this sounds manageable.
Rental Properties Are Small Businesses
You cannot be too emotionally attached to your property if you’re going to rent it out.
That’s hard for a lot of landlords. But once you rent out a property, it becomes an income-producing business. You’ll have to make business decisions based on data, laws, and results. You cannot always trust your instincts and you cannot act on how you feel. This requires a business-oriented mindset that keeps you focused on outcomes. If rent is late, will you be able to follow up with the tenant? How will you handle conflict or disputes? What if a tenant violates the lease agreement?
Think about whether you can remain professional as you undertake all the maintenance, leasing, and management duties that come with renting out a home. The best landlords are patient, customer service-oriented, and attentive to details. You need to be balanced and businesslike.
Responding to Emergencies at Your Property
There are likely to be emergencies, even if you have great tenants and even if your home is well-maintained. Things happen, and they often happen outside of normal business hours.
Unless you’re working with a professional property manager, you’ll be the point of contact for your tenants. Are you prepared to respond to emergencies 24 hours a day and 7 days a week?
If something goes wrong or there’s an emergency at the property, you’ll need to be responsive. Tenants will need access to you at all times, and that can be difficult for new landlords to adjust to, especially if you’re busy or you like to travel.
Understanding State and Federal Rental Laws
As a landlord, you’ll be responsible for knowing and complying with all of the rental laws that apply to your property and the way you deal with your tenants.
California has some of the strictest tenant protections in the country. If you make even an innocent mistake, you could find yourself being sued or fined. Make sure you’re familiar with the state, federal, and local laws. At the very minimum, you should understand:
- Fair housing laws
- Rent control laws
- Just cause eviction requirements
- Section 8 tenants using housing vouchers as income
- Service animals and companion animals
- Security deposit requirements
- Habitability standards
Legal mistakes are, unfortunately, easy to make, and they’re always expensive. If you cannot stay up to date on all the legal changes and requirements, you may not be ready to be a landlord.
Establish Vendor Relationships Early
What kind of maintenance team have you assembled? You’ll need a reliable set of vendors and contractors who you can call for simple and complex projects. Put together a preferred list of:
- HVAC technicians
Establish relationships early so that they’ll be available when you need them. Trying to find a plumber for the first time in the middle of the night while your rental property is flooding is never ideal. Check for licensure and insurance before you hire vendors to work at your property.
Get to Know the Local Rental Market
Do you know how much rent you should charge for your property?
This can be tricky, because you’re pricing based on the market, not what you think your home is worth.
As property managers, we study the market daily. You’ll need to know the market so you can price your property accurately. Otherwise, you might face longer vacancies because your price is too high. If you price your home too low, you’ll struggle to catch up to market rents – especially if your home is covered by rent control laws.
Providing a Great Tenant Experience
Without tenants, you won’t earn money.
To be an effective landlord, you’ll need to establish and maintain good relationships with your tenants. Providing a positive rental experience ensures you’re able to keep tenants in place, avoiding expensive turnovers and vacancies. Make customer service a priority when you’re renting out a home.
This extends to maintenance. Prepare to respond promptly when your tenants report that something needs to be fixed.
It’s difficult not to take things personally. If a tenant does not pay rent on time, will you be able to pursue that overdue rent without becoming angry or pushy? Do you understand the steps of pursuing an eviction if it comes to that?
Consider San Jose Property Management
Ultimately, it might be better to work with a local property manager. You’ll find you can earn more and spend less on your investment when you’re working with an experienced professional who already has the necessary systems and resources in place. Instead of learning how to be a landlord, you can experience the benefits of renting out a property without taking on the risks or the work.
If you have any questions about this or anything pertaining to the effective leasing and management of your rental property, please contact us at Metro Property Management. We’re a San Jose, California based property management company serving Santa Clara County, including South County, Campbell, Saratoga, Cupertino, Sunnyvale, Los Gatos, Milpitas, and the surrounding areas.