Becoming a landlord seems like something that one would and could only do with purpose and intention. However, this isn't the case. There are several circumstances in which a person may find themselves the new owner of a property they didn't intend to acquire.
Most often people receive the property as part of an inheritance or win it as part of a settlement in court. Others purchase a new home and can't sell their old one. There are around 20 million rental properties in the US and a chunk of these belong to accidental landlords.
If you're part of this group, then you're probably looking for some accidental landlord tips to navigate this unexpected situation. Read on for everything you need to know.
1. Weigh Up All Your Options
Although you might have an immediate gut reaction as to what your next move should be, it's important to take a step back and consider your position carefully. There are a few different options open to you and you'd be doing a disservice to yourself if you didn't consider them all.
You can choose to sell, of course. But then you need to deal with finding a buyer, making improvements, and the fees involved with selling a home.
If you choose to take over the rental property as-is you'll need to learn the ins and outs of being a landlord and cover all the costs associated with this. You can conduct a rental analysis to see if it will be profitable for you. Both choices have their pros and cons and it's important to take this into account before you make your decision.
2. Seek Professional Assistance
Because you've probably been thrust into this position without much forewarning, it's natural if you feel a little out of your depth. The very nature of being an accidental landlord means it's an unexpected situation you probably haven't been in before.
That's why, no matter what you decide to do with the property, it can be helpful to work with those who have experience in this area. Whether that's a lawyer, a property management company, a realtor, or a financial adviser. Seeking and heeding professional advice will serve you well in this situation.
3. Put Processes in Place
For those who've never done the job before, being a landlord might seem like a walk in the park. It actually involves a lot more work than you might think. You'll have certain financial and legal obligations to adhere to and of course tenants to answer to.
Because you hadn't intended on becoming a landlord, it's easy to make mistakes that can end up being costly. To avoid this happening, you should right away create defined processes for the different functions of your role so everything is as streamlined as possible. Things like client communications, accounting, and rent payments can all be automated which can be a big help.
Advice for Accidental Landlords
While there is a certain amount of work involved, it is possible to become a successful accidental landlord. Follow the above tips for your greatest chance of accidental landlord survival.
If all of the above sounds a little bit daunting, know that there are resources and supports available to accidental landlords. If you've got a new Denver rental property that you're not sure what to do with at Laureate ltd we'd be happy to help. Get in touch today to learn more about what we do and how we can help you.
