Deciding to invest in rental property is a big decision. One of the first things you need to do is learn how to select the property that is right for you. You need to find the one that will generate enough income to make your investment worthwhile, but require as little work on your end in terms of functioning as a property manager.

Making a list of the features and criteria that you are in search of will make it easier to evaluate each of the properties that you are looking at and decide which one is the right one for you and what you should steer clear of.

There are a few important factors that are fairly universal for all investors. First, the condition of the property is very important. When you find a property with a price tag that just seems “too good to be true,” then it probably is. There is likely some hidden problem, or multiple problems, and a reason that the price is so low. Experienced investors can often predict the profit at the time of purchasing the property.

Even if you are planning on keeping a property for a long time, you need to be aware of things that may later affect the resale value. Understand what types of major repairs may be required over the next few years, new roof, new furnace, painting/siding, and other types of major projects should be carefully evaluated and the cost of these things should be figured into your cost. While a property that needs work may be a better price, a property that is in excellent condition can be a far better long term investment, even if the price tag is higher.

Do not ever disregard the importance of location. Having a property located on a busy street is not always ideal, especially for families with children. Being close to schools and shopping centers is often important to tenants. A location that offers off street parking is usually very attractive to renters.

Research the history of the property, and find out if it has been an owner occupied property or a rental property. This is important, as often the owner occupied properties have been more carefully maintained and may have fewer underlying issues that could spring up on you later.

If there are already tenants occupying the property, then you need to be aware that their current lease must be honored. Meaning, you are not going to be able to raise the rent until the terms of the current lease expire. There may actually be some local or state laws that govern how much you can increase the rent, so be sure to investigate these regulations as well. Having tenants already occupying the property can be an advantage and a disadvantage at the same time. Often, choosing your own tenants means that they are of the quality you expect, and not qualified by another landlord’s guidelines, which may not be the same as your own.

If you are not able to do repairs yourself, you will have to consider the costs associated with hiring a property manager to take care of them for you. While this is an additional expense, it will also free up some of your time that you would otherwise be spending fixing up your rental property.

Lastly, when reviewing the price of the property, make sure that you include not only the actual mortgage payment amount, but interest, taxes, insurance and any other associated fees and costs that may arise. Be sure that you will be able to cover these costs and still make a profit from your investment.

It happens with any property, you will have occasional vacancies that you have to handle. As a property manager, you will want to get that unit rented as quickly as possible, so that you can maximize your rental income. If you purchase a vacant property, then it may take some time to find just the right tenants.

Each month that your property is vacant, you will lose potential revenue. There are a few things that you can do while your property is vacant, however, to maximize your options.

If your property is vacant, this is an excellent time to make any needed repairs or improvements. It is far easier to schedule maintenance tasks when you don’t have to work around a tenant’s schedule. You have a great opportunity to make the unit more appealing to future tenants, by painting, having carpets cleaned, or replacing anything worn or broken.

If your property is vacant for a while and you are having difficulty finding quality tenants, you might want to consider offering an incentive such as a lower first month’s rent, or installing a new amenity like a dishwasher or something. Often these small things can attract a new batch of potential tenants.

Be sure to advertise liberally. This means you should utilize each and every source you can, such as local papers, hanging flyers, online postings, etc. The more that you can get the word out, the more likely you are to find tenants quickly. Make sure you also have a “For Rent” sign prominently displayed on the property to attract those people shopping for a place to live in that neighborhood. Spending a little bit of money on advertising may prevent you from having the property vacant too long, which can be very costly.

If you know that a tenant will be moving out soon, begin to search for replacement tenants before they even leave. You may be able to have a seamless occupancy this way, one tenant moves out and another moves in the next day. This is truly an ideal situation, but it often works well. Ask your current tenant if they know of anyone looking for a place. Begin advertising, and show the unit (with your current tenant’s permission, of course) as often as possible.

Although you do want to rent your property quickly, being patient and waiting for the right tenant is important. Conducting thorough screenings and background checks will save you money, time and hassle in the long run from potentially making poor choices of tenants. Begin to screen potential applicants during the first phone call they make to you about your property. Encourage them to drive by and then set up an appointment with you to see the inside.

Finally, always be sure to carefully follow all fair housing laws and regulations to avoid discrimination. Ask each potential tenant the same questions (using an interview form helps with this). To be a good property manager and landlord, you must adhere to these regulations exactly.

Any time that you invest in rental property, you need to be prepared to spend a certain amount of time taking care of that rental property, and acting as a property manager. Many landlords choose to hire someone to work for them as a property manager, and take care of many of the day to day tasks that arise, as well as fill vacancies and manage the completion of many of the required repairs. Knowing how to choose a terrific property manager will help you find someone that you can truly trust to get the job done right.

A primary role of your property manager will be filling vacancies in your units by finding tenants. They are also going to handle signing of any rental agreements, leases or addendums that you require from your renters. This means that you have to find someone that is responsible and will not let “just anyone” into your rental property.

Your property manager should be able to screen potential tenants and decide how reliable they will be. They should always check references. Checking credit scores and criminal backgrounds is not a bad idea, either. Be sure that you know what methods any property manager you are thinking of hiring will use to gather this critical information.

Make sure that your property manager will effectively collect the rent, on time each month. Inquire regarding what they will do when a tenant does not pay on time, and how they will go about getting that money. Discuss how issues like bad checks from tenants will be handled.

Discuss in detail your expectations regarding how often the property manager should be checking the property, and what sorts of things they will be routinely inspecting. Decide how they will document their inspecting, and how they will notify you regarding tenant problems, repairs and other issues. You need to know how this flow of information will occur, in order to keep everything about your property running smoothly.

Be sure you know the amounts that the property manager will charge you. Discuss how often rents are to be paid to you, what levels of commission or charges you will be required to pay to the property manager, extra fees associated with specific tasks, etc. Before hiring a property manager, compare prices and fees, as well as services offered and qualifications, so that you can make the best choice as you select someone to run your property for you.

One consideration is using an on-site manager, someone who is also a tenant. This person needs to be a highly trusted and respected person, not only by you but also by your other tenants if you want to prevent any major problems. Having someone that lives on the property is a bonus, because they have a vested interest in keeping the property nice.

Having a property manager can be an excellent investment. They can save you many hours of your precious time, fill vacancies quickly, and manage small day to day issues without even involving you, most of the time. Just be sure to select your manager carefully in order to avoid any additional hassles and headaches.

It is a fairly common problem that one tenant will complain that another tenant is playing music too loudly. As a landlord or property manager, this is a very common problem that you will be faced with. Receiving numerous phone calls from neighbors or other tenants can be frustrating and take up much of your time. There are some ways of handling this problem that are better than others, and keeping all of your renters happy is definitely a priority.

For landlords who own multi-unit properties, this is usually an even more important issue. With thin walls, other tenants may not want to be disturbed by a tenant’s music or instrument playing. If you do not handle the situation appropriately, you will end up having tenants moving out—and vacancies are not something you want to have on a regular basis. Also, you want to maintain a reputation as a fair landlord, so that you can continue to attract quality tenants in the future.

It is always best to clearly discuss (and provide in writing) a list of your expectations for your tenants, including any noise considerations, prior to having them move in. Often this will prevent problems before they even occur. Be certain that you clearly indicate if you expect there to be “quiet hours” on the property. This is critical when you have a multi-unit property, to keep all tenants happy. Some landlords will explicitly state in the lease that music cannot be played at a level that can be heard outside the unit earlier than 8 am or later than 10 pm. Most people would agree that these are reasonable guidelines, and learn to tolerate the mid-day noise a bit. These guidelines should apply to all types of noise, including television and gatherings as well.

If you have these guidelines in place, you should periodically check to see that all tenants are abiding by them. If you find that they are not following this rule, you should let them know that they are in violation of their lease. Allowing the issue to continue without any intervention on your part will make it more difficult for you if it comes to the point where the complaints are so many that you must consider the eviction process because you were sending a message that the action was acceptable.

While it may not always be feasible for you to check on the property during the early morning or late night hours, you can always ask other tenants or neighbors to let you know how things are going and ask if they are disturbed by the noise levels. When neighbors let you know as soon as a problem arises, it gives you a chance to fix the problem before they are inclined to call the police or the town about the issue. Neighbors need to know that you are a responsible landlord and that you will make sure the neighborhood has a good atmosphere and good residents (your tenants).

If a problem is identified with a specific tenant, you should first speak to the tenant verbally then follow up with a notice in writing detailing your discussion and any resolution that was decided upon. Your tenant needs to understand the severity of the situation (meaning they are in violation of their lease and in danger of being evicted if they do not immediately comply). The more documentation you have, the better it will be for you.

As with most situations, prevention is best. When your tenants know right off the bat that your rules are to be taken seriously, then they are more likely to follow them. Fewer infractions means happier tenants and a happier landlord. Establishing and maintaining a cordial relationship with all of your tenants is critical to being a good landlord. Owning rental property means you need to be a responsible landlord or property manager and ensure that your property is not a problem in the neighborhood.

Now may be an excellent time for you to decide to make an investment in rental property or become involved with property management. Despite a bit of a weakening for the local markets, there are so many significant tax benefits that can make it a very good time. If you are a homeowner then you may be familiar with many of the possible tax benefits available. For example, you may already know that when you purchase a home with a mortgage loan, you can deduct the interest that you are required to pay on the mortgage from your income taxes.

You can also tap into other tax benefits that you may not be familiar with. Many of the maintenance and repair costs will be deductible, as well as many of the utility and insurance costs. If you choose to hire a real estate agent to manage your tenants or a property manager, you can usually write off any fees associated with those services as well.

Deductions for depreciation will also commonly be a big write off. Depreciation provides you with a tax vehicle to deduct perhaps the largest expense that is associated with property ownership—the actual price of the property. Understand that depreciation does take place over an extended period of time. For example, residential property depreciates over a period of 27 ½ years and commercial property will depreciate for 39 years. A rental property that costs you $150,000 will depreciate at a rate of approximately $5,000 per year.

Improvements that you make to your rental property can also often be deducted. However, these deductions come in the form of depreciation, rather than direct deductions. The improvements affect your cost basis. Repairs, on the other hand, usually can be deducted in the tax year that they were made. If you are not sure if something qualifies as a repair or an improvement, then understand that a repair is something that keeps the property in good condition, while an improvement is something that will add value to the property.

Landlords cannot deduct the value of their own labor, but they can deduct travel related to making repairs or improvements. These costs can include mileage, airfare, hotel costs and some meal expenses.

If you operate a home office that allows you to manage your property, then you can deduct certain expenses related to that, including a portion of your homeowner’s insurance, utilities and your own mortgage costs. Home office deductions have specific qualifications, and the space must be dedicated for business use only.