When diving into the world of real estate and property investment, a new landlord checklist can help break complicated requirements into clear action steps and areas of focus. And this is a big benefit, because while real estate investing can be lucrative, it’s also a lot of work. Along with acquiring properties and screening potential tenants, landlords are responsible for navigating complex legal matters, handling repairs and property maintenance, communicating with tenants, and much more.
In other words, property managers wear a lot of hats, and the work they do takes a great deal of time. One great option is to partner with a property management team that offers best-in-class systems and expertise, taking the burden off your shoulders and ensuring that your property is managed with excellence from day one.
But whether you’re considering a property-management partner or getting started on your own, our new landlord checklist will give you a great jumping off point. We’ll cover:
Initial Considerations:
The first item on any new landlord checklist involves learning about your area, understanding requirements, and getting prepared.
Here are some important things to focus on:
Familiarize yourself with inspection & registration requirements
Understanding inspection requirements in your area might not be the most fun part of real-estate investing. But the more information you have up front, the more you will be able to make good decisions as you prepare and manage your property.
For example, if you know the specific requirements for rental properties in your city, such as minimum square footage for bedrooms or the maximum number of unrelated tenants allowed in a single dwelling, you can ensure your property complies with these regulations from the outset.
How long is a certificate of occupancy (C of O) valid for? Is a rental registration also required?
Equip yourself with good education, and you will save yourself from costly and frustrating issues in the long run.
Understand your state’s landlord-tenant laws
Landlord-tenant laws vary from state to state, so even if you’ve managed properties in other states, it’s critical that you understand the unique rules and regulations in each area.
Take a rent increase, for example. Michigan does not have specific statutes governing rent increases, so landlords have more flexibility in adjusting rent prices, provided they give proper notice. In Ohio, however, landlords must provide at least 30 days written notice for rent increases for month-to-month tenants and adhere to the terms of the lease agreement for fixed-term leases.
Equipping yourself with knowledge of landlord-tenant laws from the outset will help you avoid complexity and headache in the future.
Draft a comprehensive lease agreement
Crafting a lease agreement is more than just paperwork for landlords; it’s about setting the stage for a smooth landlord/tenant relationship. Start with the basics: property information, rental terms, and party identities. Then, clearly outline details like
- Responsibilities for maintenance and utilities
- Rules on subletting
- Expectations on property alterations
- Rules and fees for pets
- Terms for security deposits, including deductions and returns
- Lease termination and renewals
- Late payments
- Evictions
- Etc.
Compliance with local and federal housing law is crucial, so it’s highly recommended that property owners seek legal counsel and/or work with a professional property manager, to help ensure the lease is fair and legally sound.
Implement a thorough tenant screening process
Most seasoned landlords would agree that having a bad tenant is worse than having no tenant at all.
Effective screening is vital for property management success. But it’s about more than just credit scores and financials from a simple, online screening provider; it’s about understanding the tenant’s history and establishing a consistent, strong process to verify and cross check addresses, phone numbers, and employment information from the application.
For a point of reference, at Epic Property Management, our screening process consists of 12 steps.
By independently verifying things like eviction or payment history, and then cross checking the validity of all information provided, you greatly reduce fraudulent activity and increase your chances of success. Initial prospective tenant calls and in-person showings can also be game changers in the tenant-selection process, but they are becoming increasingly rare in the industry.
Maintaining these exceptional standards for tenant screening is something we pride ourselves on at Epic Property Management, because it makes a huge difference in the success of our clients’ investments.
Familiarize yourself with eviction processes
No new landlord wants to think about evictions, because we all hope they’re something we’ll never need to deal with. But burying your head in the sand won’t help.
Understanding the details of the eviction process in your state will help you make confident and compliant decisions, should you ever need to navigate one. Either work with an experienced property-management partner from the beginning, or take the time to learn about your state’s eviction process now, so you’re prepared if you ever need to deal with it in the future.
Our “Property Owner’s Guide to the Michigan Eviction Process” is a great starting point for Michigan investors:
Build a reliable maintenance team
You will certainly need to put together a reliable maintenance team that can help you stay on top of routine property maintenance. No matter how much renovation has been done, or how new a property is, things will break over time.
It’s key to have strong relationships with plumbers, electricians, and other skilled contractors so that when a need arises, you can take action without delay. A reliable maintenance team also comes in handy if you’re managing multiple rental properties, as it will help you quickly delegate tasks and resolve issues.
Just be sure to track and monitor all completed repairs and retain those records.
Evaluate insurance options
Insurance will be required if a lender is involved. However, even when a property is owned free and clear, insurance offers great peace of mind for property damage, liability, loss of rental income, tenant lawsuits, and several other issues that could occur.
Talk to your insurance broker when you’re getting started and learn about the variety of coverage options.
Maintenance & Repairs
When you’re preparing a property for rent, you will likely need to begin with some level of repairs or renovations. Therefore, this step can make up a big section of your new landlord checklist—and your budget.
How can you decide what repairs and renovations to make before marketing your property? At Epic, we use 2 categories: Required and Optional. And we use a simple checklist to identify repairs that should be handled immediately and prioritize those that are optional or may potentially be deferred. A few examples:
Required repairs might include
- Fixing a leaky roof
- Repairing a broken heating system
- Addressing electrical problems
- Remedying structural damage
- Repainting
Optional repairs could include things like
- Replacing outdated fixtures
- Upgrading flooring for aesthetic purposes
- Installing new mulch and/or bushes for curb appeal
- Etc.
The required and optional repairs checklist—along with our rental remodel checklist—are used on initial walkthroughs to prioritize which tasks are essential for maintaining the property’s safety, habitability, and compliance with regulations.
Inspections
One of the landlord’s main responsibilities in managing the inspection process is facilitating and coordinating city inspections themselves. What might an inspection include? A few examples:
- Checking the condition of structural elements like the roof, foundation, and walls
- Identifying any signs of damage or deterioration
- Reviewing essential systems like plumbing, electrical, heating, and cooling, to ensure they are working efficiently and meet regulatory requirements
- Looking for pest infestation, mold growth, or any other safety or health hazards
Landlords should make sure that inspections are conducted professionally and in accordance with state laws and lease agreements. If something is discovered during an inspection, it’s up to the landlord to address the issues promptly. And the scheduling and oversight of the inspections is surprisingly time-consuming.
Again, a professional property manager can be a huge time and money saver here.
For more on city inspections, check out this detailed post:
Make that Money
Real estate investing can be a very lucrative business, but landlords must have a firm understanding of how much money they’re making and spending—and create a system that allows them to consistently track income & expenses.
Rent Collection & Management
Over the past few years, tenants have come to expect easy and innovative rent-collection processes, so setting up an online rent-collection system is important in today’s rental market. It offers convenience for both landlords and tenants, and a good property manager should provide this as part of their service.
As you step into managing multiple properties, you will need an organized system to ensure you are getting paid and your tenants are receiving documentation that they’ve paid their rent on time.
The software we use at Epic Property Management includes advanced tools for rent collection, expense tracking, and more. So landlords can track and receive payments effortlessly, while tenants can easily view their ledgers, documents, and payment history in real time.
Initial Payments & Security Deposits
You’ll also want to come up with a system for collecting earnest money deposits; first month’s rent (or pro-rated rent); and security deposits. We highly recommend collecting these payments in certified funds, such as a cashier’s check or money order, to ensure immediate and irreversible payment.
Landlords should also establish clear policies and procedures for collecting, holding, and refunding security deposits, which is a very regulated area in landlord/tenant law.
Marketing
If you want to make money, you need tenants. And if you want tenants, you’ll need a plan for how to market your property. This requires a thorough understanding of the expectations of your target tenant market, such as style of property, quality of finish, what appliances to provide, etc.
The more you know the area and the ideal property, the more you’ll be positioned for a quick and seamless lease up.
Your marketing strategy should emphasize the unique features and benefits of your property, such as its location, amenities, size, or special features like a backyard, garage, or off-street parking. And you’ll want to use an array of marketing channels to get the word out.
What’s Better than a New Landlord Checklist?
Rental property ownership comes with its challenges, but with the right preparation and support, it can be a rewarding and lucrative venture. This new landlord checklist is a great place to start.
If self-managing is not your thing, check out Epic Property Management. Many of our clients believe that Epic actually saves them money by capitalizing on our efficiencies of scale in maintenance, repairs, and management; streamlining processes to maximize efficiency; and freeing up time for other ventures.
Contact us today to learn more about how The Epic Advantage can provide industry-leading efficiency and unparalleled service, unique to the industry.
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