Victor Makras on Ensuring Your First Rental Property is a Success, Part 2

May 19, 2011
Based on nearly 30 years of experience in the San Francisco real estate business, Victor Makras provides tips for new landlords.

Victor Makras on Ensuring Your First Rental Property is a Success, Part 1 here

Know your local tenant rights and obligations

Once you sign a lease with a tenant, both of you have rights and obligations under the Lease and under local laws and ordinances. Avoid  pitfalls by understanding the procedures and requirements necessary for evictions, maintenance, and resolution of other issues. Also, if you live in a jurisdiction with rent control, you will be  limited as to how much you can raise the rent once the lease is signed, so make sure you carefully calculate a rate that meets the current guidelines.

Have your maintenance team in place in advance

If you rent out the unit and something goes wrong, it will be very expensive if you don’t know where to turn for repairs. Have an electrician, plumber, and general handyman on call, so that you can quickly resolve the issue. Also budget for regular upkeep and maintenance work.

Have cash reserves for emergencies.

You will have periods without tenants, or a tenant may fail to make a payment on time. Having the cash reserves on hand to cover a few months of mortgage payments will ensure that you can weather any eventuality. It also prevents you from rushing into a less-than-ideal rental situation that could prove more costly in the end. No tenant is often better than a bad tenant, and the flexibility to wait for someone qualified  to come along will pay dividends in the long run.

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