More than ten million Americans qualify as landlords. If you've recently joined this elite group by accident, you may be wondering about your new responsibilities as a rental property owner.
The good news is that you aren't alone. Accidental landlords are more common than you might guess, whether due to inheriting property or being unable to sell your current home.
No matter how you ended up with your landlord responsibilities, the first task on your checklist is to learn how to navigate your new role successfully. It all begins with this guide to the top five tips for accidental landlords.
1. Change Your Property Insurance
If you currently have HO3 insurance for the property you have become an accidental landlord of, you must change your policy. Landlords need DP3 (dwelling or landlord insurance policies) insurance to protect their investments.
DP3 policies protect landlords from legal liability in case the tenant's personal property gets damaged, stolen, or lost.
2. Invest in Marketing and Tenant Screening
Finding the right tenant for your property is one of the most crucial aspects of being a landlord. It begins with marketing your property to the right occupancy and continues with thorough tenant screening.
Marketing and tenant screening are labor-intensive and, sometimes, expensive tasks. However, they are a must to find serious, responsible occupants who will treat your accidental investment with the same care you would.
3. Find a Property Maintenance Company
Maintenance is essential for preventing your property's value and providing a positive experience for tenants. It can also reduce risk since a well-maintained property is a safe property.
Property owners need reliable contacts for routine maintenance and emergency issues that may crop up at any point during your tenant's occupancy.
4. Learn Financial Reporting Requirements
Becoming an accidental landlord is like starting a new business. And, like all businesses, you have to keep accounting records for tax purposes. That means tracking income and expenses, preparing an annual 1099 form, and more.
When tax filing time comes around, you can take advantage of deductions to lower your tax bill and increase your profits. For example, your DP3 landlord insurance policy is usually a tax-deductible expense.
5. Hire a Property Management Company
Don't have time to market your property, screen tenants, secure a maintenance contract, and keep up with financial reports? Hire a property management company to knock out these tasks for you.
The right property manager can help first-time landlords with these tasks and more to secure your cash flow without you ever having to lift a finger.
We Help Accidental Landlords in North Carolina
Becoming a landlord is an exciting and profitable journey. Yet, it can be overwhelming, too. With the help of an expert property management company, you can tackle your new role with confidence and start earning profits from your accidental investment.
Do you need help managing a rental property that recently fell into your lap? Flagship Realty Group is a full-service property management company founded by real estate investors for investors, including accidental landlords like you.
Contact Flagship Realty Group today to learn more about our property management offerings.
