10 Tips for Exchanging Contracts and Finding Tenants for Your First Rental Property

Introduction

In the first part of this series, which you can find here, we discussed the best buy to let mortgages for first time buyers, and what sort of things to think about when choosing a potential rental property. For most people, this is the first part of their property investment journey.

If you're like most people, the idea of investing in your first rental property is an exciting one. But before you can start collecting rent checks, there are a few things you need to take care of. One of the most important steps is finding tenants for your property. In this blog post, we will share 10 tips for exchanging contracts and finding quality tenants for your new rental!

1. Know what to look for in a tenant

When you're looking for tenants, it's important to know what you're looking for. Are you looking for long-term tenants or short-term? What kind of rental income are you hoping to generate? These are important questions to answer before you start your search.

Some landlords prefer long-term tenants because they provide stability and a steady income. Others prefer short-term tenants because they're more flexible and may be willing to pay a higher rent. There's no right or wrong answer here, it really depends on your personal preferences.

When it comes to rental income, you'll need to decide how much you're hoping to generate each month. This will help you determine what kind of tenants you're looking for and how much you're willing to spend on marketing and advertising.

If you're looking for long-term tenants, the best way to find them is through word-of-mouth. Ask your friends, family, and colleagues if they know anyone who's looking for a place to rent. Although given the state of the market at the moment, it won't be too hard at all to find tenants!

2. Have a solid contract in place

Once you've found a tenant, it's important to have a solid contract in place. This contract should outline the terms of the tenancy, including the length of the lease, the monthly rent amount, and any other rules or regulations that apply.It's also important to include a clause that allows you to terminate the tenancy early if needed .

This contract will protect both you and the tenant, so it's important to take the time to create a thorough document. If you're not sure where to start, there are plenty of templates available online.

When it comes to signing the contract, it's best to do this in person. This way, both parties can ask questions and clarifications if needed. Once the contract is signed, make sure to keep a copy for your records.

3. Make sure your property is ready for tenants to move in

Before you can start showing your property to potential tenants, you need to make sure it's in top condition. This means repairing any damage, giving the place a fresh coat of paint, and decluttering the space. You may even want to consider hiring a professional cleaning service to get the place ready for move-in day.

In addition to making sure the property is in good condition, you'll also need to make sure it's safe. This means checking for any potential safety hazards and making sure all of the smoke detectors are working.

4. Have Professional Photos Taken

It's well known that having perfect photos vastly improves the likelihood of converting a listing. In fact, in the early days Airbnb sent round professional photographers to listings to ensure that they had a higher chance of converting. No one wants to see your blurry iPhone photos and these won't help you command a premium, so fork out!

5. Screen potential tenants

Once you've found a potential tenant, it's important to screen them before signing the lease. This can be done by running a background check and/or checking their credit score. You may also want to ask for references from previous landlords.

Screening potential tenants is an important step in the process because it will help you weed out any bad apples. By taking the time to do this, you can avoid potential problems down the road.

6. Exchange contracts with the tenant

After you've found a tenant and they've passed the screening process, it's time to exchange contracts. This is a formal document that outlines the terms of the tenancy agreement, so it's important to review it carefully before signing.

Both you and the tenant will need to sign the contract, so make sure everyone has a copy. Once the contract is signed, you'll need to give the tenant a copy of the lease agreement.

At this point, you'll also need to collect the security deposit and first month's rent from the tenant. The security deposit is typically one month's rent, but it can be more depending on the state or country you're in.

7. Follow up with the tenant after they move in

Once the tenant has moved in, it's important to follow up with them to make sure everything is going smoothly. This can be done by sending them a welcome letter or email, or giving them a call.You should also check in on the property periodically to make sure everything is in good condition. If you notice any damage, be sure to document it and let the tenant know as soon as possible.

By following up with the tenant after they move in, you can build a good relationship with them and avoid potential problems down the road.

8. Deal with any problems that arise

When renting out your property, you will likely encounter some problems along the way. It's important to have a plan in place for how you will deal with these issues. Here are a few tips: always document any problems that arise, as well as what steps you've taken to fix them. Always keep communication open with your tenants. if a problem persists, also consider hiring a professional to help resolve the issue.

The best way to avoid problems with your tenants is to screen them carefully before you exchange contracts. This is detailed in Step 4, and is important because it will likely save you a whole load of trouble at some point in the future.

9. Collect Rent in a separate bank account

You'll want to keep this separate from your other accounts if you're collecting rent as an individual, or set up a limited company if you're interested in harvesting the tax advantages of doing so, and are potentially a higher rate taxpayer already. We've already put together a guide on the best bank accounts for rental income, so you'll have some help with this.

10. Manage Your Assets Together

In addition, it becomes a lot easier when you start managing both your rental properties and investments on one platform, in order to have complete visibility and control. You can do this on the Strabo platform, with real time yields and valuations available too. Sign up at the foot of the page to get started!

By following these tips, you can help ensure a smooth transition into becoming a landlord. Let's get started!

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