What Are the Benefits of Owning a Rental?

Are you looking to add a rental property to your portfolio? Real estate has long been an attractive proposition for many people, and with more than 60% of US citizens currently renting, now might be the perfect time to become a landlord. 

This article has everything you need to know about the benefits of owning a rental and whether it is the right avenue for you to pursue.

What Are the Benefits of Owning a Rental?

The benefits of owning a rental are vast, and many people wish to own a second property to rent out for various reasons. These include generating extra income, building a nest egg, or covering the bills of a primary residence so the owners can travel freely.

A rental generates a stream of reliable income

Rental properties are an excellent passive income stream, and for many owners, they are a low-maintenance way of generating income for relatively little effort. 

Of course, before making a purchase, you should crunch the numbers. It’s important to consider your total expenses, the money you have already invested into the property, and general maintenance costs against what you can realistically expect from a rental income.

Renters who pay on time help you make more money

If you find renters who pay on time, you can make more money. Having a reliable income to cover your expenses frees up additional cash for investment elsewhere. 

Knowing your renters are guaranteed to pay on time means you can commit to investing in other properties or avenues to help you increase your net worth, create a nest egg, and develop your portfolio.

Quality Tenants Help Ensure Your Property Remains Undamaged

A common concern for owners is that their property will sustain damages if it sits empty or if they take on the wrong tenants. However, getting the right tenants can reduce this possibility and allow you to rest assured that the property is being cared for as you would like it to be.

Lessened risk of property being damaged or destroyed

A good tenant will appreciate the need to keep the property in mint condition and will ensure that any modifications they wish to make align with your preferences. Quality tenants will think of your property as their home and, as a result, will be less likely to cause significant damage.

No need to pay for extensive repairs

Finding the right tenants for your home can have many benefits, but one of the more appealing ones is that you won't need to pay for extensive repairs. Considerate tenants will care for the property, tackle small maintenance tasks themselves, and avoid causing any damage.

That's not to say your tenants should be expected to complete necessary repairs on your behalf. You are still legally obligated to carry out repairs when required, but quality tenants will be mindful of how they treat your property, which helps you avoid expensive renovation costs.

Good Renters Help You Maintain a Cleaner Property

A clean property will help your investment retain its value and look good at all times. This is where a good tenant can be your best ally.

Finding a considerate tenant shouldn’t be too difficult. Most people don't want to live in squalor and will take pride in where they live. They will be on top of cleaning the property and maintaining the grounds. If expected, they will mow the lawn, take the trash out, prevent items from piling up, and ensure that hygiene levels are upheld throughout their time renting.

How to Identify a Quality Tenant

Now that you know about the benefits of finding a quality tenant for your rental, you need to know how to find them. There are over 44 million renters in the US, and not all are ideal tenants.

Luckily, there are a few things you can do as a landlord to help you narrow down choices and find the right person to live in your property.

Conduct a credit check

Credit checks are instrumental in helping you find suitable tenants. Run a credit check to help you assess if someone is likely to pay their rent on time or if they will leave you high and dry. You can refuse a tenancy based on poor credit even if they have the means to pay. Just because someone can pay doesn't always mean they will, and a high credit score is proof that they pay what they owe.

Run a background check

Background checks include checks from past landlords, employers, friends, associates, etc. If a prospective tenant is unwilling to provide these details or is vague about references, this can be a red flag. Be sure to review all application details thoroughly and don't overlook any aspect, especially a lack of landlord details or references.

Set up a meeting

Conduct an open house, have appointments arranged for viewings, and be present or have someone you trust present to meet suitable applicants. Just because a potential tenant looks good on paper doesn't mean they're a good fit. Meeting them face to face lets you get a feel for who they are and what they're looking for from their next home. It provides space for both parties to ask and answer any questions they might have. Talk to prospective tenants about their previous property. Ask why they're moving and how long they plan to stay.

Allow Rooftop Rentals to Help

While there are undoubtedly many benefits to owning a rental, the small details can be time-consuming. Managing tenants can be a full-time and complex undertaking. At Rooftop Rentals, we can help you identify the right tenants and ensure that your investment property is taken care of. Contact us today to learn more!