Renting out your home in Phoenix can open up a new world of financial rewards for you. The potential passive income can help to boost your savings or enable you to pay down debt. In addition, you may be able to build wealth through potential high property appreciation rates, as well as minimize your tax obligations.
Becoming a landlord can, however, be far from being easy, especially at the start. There is an array of responsibilities that come along with being a landlord. So, to prepare you for these challenges we at Keyrenter Premier have put together the following tips to help you get started.
Learn Your Responsibilities
First and foremost, you should determine whether you can manage the obligations that come with being a landlord. While the benefits of renting out your Phoenix home can be numerous, you’ll need to be at the top of your game to gain them.
Being a landlord goes beyond just rent collection. The following are some other obligations that you’ll be required to perform.
- Staying on top of repairs and maintenance.
- Abiding by all the Arizona landlord-tenant laws, including security deposit rules and the Fair Housing law.
- Abiding by the warranty of habitability by providing your tenant with a home that meets the applicable health and safety codes.
- Filing your taxes accurately during the tax season.
- Ensuring your tenant enjoys their property in peace and quiet.
- When a lease can be broken.
If you find these responsibilities daunting, then you may want to hire a professional to handle your property management duties. A good property manager will have the experience and skills to manage your property reliably and professionally.
Understand the Arizona Landlord-Tenant Laws
Every industry has a set of laws that its workers must abide by and real estate is no exception. As a landlord, you’ll need to abide by certain laws in order to run a successful rental investment.
The following are some of the landlord-tenant laws that Arizona requires landlords to abide by.
- The state’s security deposit laws. For example, you must not charge tenants more than one and a half months’ rent as a security deposit. Also, you must return your tenant’s deposit within 14 days once they move out.
- Abide by the warranty of habitability. As a landlord, you have a legal responsibility to provide your Phoenix tenants with a habitable property. Also, you must make the requested repairs within a period of 10 days.
- Treat tenants fairly as per the Arizona Fair Housing laws, which protect tenants against housing discrimination on the basis of color, race, religion, gender, nationality, disability, and familial status.
Prepare your Phoenix Home for Renters
Ensuring your home looks desirable is key to attracting the right tenants quickly and keeping your occupancy rates high. Long vacancies will eat into your profits and turn your lucrative investment into financial challenges.
You can get started by making your home attractive by doing the following.
- Thoroughly cleaning the home.
- Taking care of any repairs.
- Replacing old and inefficient appliances with new ones.
- Invigorating the look of the yard.
- Giving the home a new paint job.
Start Marketing the Home
Once you have cleaned up the property, you can begin the marketing phase. To get started, you’ll need to come up with a list of things that make the property stand out. For example, a garage, an air conditioning unit, or a washer and dryer.
Next, draft a rental ad. Make it clear and concise. The following are some important details you won’t want to leave out.
- Unique features that the home comes with.
- Descriptors that perfectly match the apartment. For example, Beautiful, Quiet, Lots of Open Space, or Freshly Renovated.
- Mention the neighborhood. For instance, Casual Community, Quiet Neighborhood, or Hip Neighborhood.
- Give one exciting detail about the property. For example, New Renovations, Private Backyard, Walk-in Closet, and Granite Countertops.
- Provide the prospects with more information regarding your rental property. For example, Smoking Policy, Security Deposit Amount, Rent Amount, and Pet Policy.
The following is an example of what a good property description should look like:
“Upscale and Urban: Beautiful, naturally well-lit 2 BDR 2BTH Apartment in a quiet neighborhood. Close to the Scottsdale Community College, and just a few minutes’ drive from Scottsdale Historical Museum and the Phoenix Mountains Preserve. Amazing nightlife and plenty of shops nearby.
Hardwood flooring throughout and balcony for entertaining. Pets allowed. Rent: $1,200, utilities are excluded. Get in touch by dialing XXX-XXX.”
Screen Tenants Thoroughly
After marketing your property, tenants will start calling to inquire about the unit’s availability. So, don’t make the mistake of renting to the first tenant that shows interest to rent your home. It can be a grave mistake and lead to evictions.
You’ll want to vet all the prospects who show interest to rent the home in order to improve your chances of landing the most qualified one. Your screening process should, ideally, qualify tenants on the basis of their:
- Income level
- Credit rating
- Employment history
- Rental background
- Criminal status
Once you’ve landed the right tenant, make sure to ask for a security deposit and have them sign the lease.
Hire a Property Management Company
Managing a rental property requires a certain level of skill and experience which if you don’t have, hiring a property manager may be in your best interest.
While it does come at a cost, the benefits that come with hiring a good manager can more than makeup for the expense.
Renting out your rental property can help boost your financial prospects. But it can only do so if you manage it properly.
If you’re just starting out as a landlord in Phoenix, KeyRenter Premier can help. We’re providers of customized, investor-focused, holistic property management solutions in Scottsdale, AZ. Get in touch to learn more!