Becoming a Utah landlord can make it possible for you to create passive revenue streams. You need to know how to make informed decisions, though, before you can become a successful property owner. The following six key steps will help you get started right and make it easier for you to make money from your rental properties.
Learn How to Find a Good Investment Property
Imagine this scenario: You stumble upon the perfect property. It’s in your price range, has great curb appeal, and is relatively new. You purchase it before anyone else can wait eagerly for tenants (and profits) to roll in.
Fast forward a few months and the situation looks dismal. Vacancies and costs have skyrocketed, and you can’t explain why.
That situation is every Utah landlord’s nightmare. The truth is, not every property is a good investment, no matter how appealing it seems to you. Before you purchase a property, ask yourself these questions:
- If you were looking for a home, would you want to live in this area? Would the location appeal to you?
- Are prices in the surrounding business and residential areas expected to increase or decrease?
- What is the vacancy rate in this property’s neighborhood?
- How much will it cost to maintain the building and grounds?
- Will the property require major renovations?
- How much time will you need between buying the property and renting it out?
- Can you find a good price-to-rent ratio that attracts tenants and earns you a profit?
Once you answer these questions, you’ll see your potential properties as they really are. You’ll mitigate the risks of your investments and avoid scenarios like the one above.
Understand Your City’s Landlord and Tenant Laws
Some city laws support landlords better than others. Utah, for example, has lenient eviction policies, which gives you a little leverage when dealing with unsuitable tenants. Once you file eviction papers, the court can take action in two or three weeks. Some states take much longer.
Learn more about tenant rights, laws, and protections by visiting the U.S. Department of Housing and Urban Development’s Utah page.
Determine How You Will Manage the Property and Payments
You don’t necessarily need to manage your property and collect payments yourself. You can hire a management company to perform those tasks for you. Hiring a manager, of course, will lower the profit that you get from your rental property but will ensure that the job gets done right.
You might find that you have enough time to manage one or two properties. Eventually, it could make sense for you to hire someone to take over management for you. Expect to reevaluate your decision as you purchase more rental properties.
Research Utah Landlord Rental Prices
The amount of rent you can charge depends on several factors, such as your property’s location and the state of your rental unit. A recently updated, three-bedroom unit in Greater Avenues could go for $3,000 per month or more. A studio apartment that needs some renovations in the same neighborhood might only get $900 per month.
Research rental prices near your property to see what other landlords charge. You will need to find a price that renters are willing to pay but still earns you a profit.
Learn How to Vet Potential Tenants
You want to make sure you rent your property to a trustworthy tenant. Before you become a landlord, make sure you know how to:
- Run a credit check
- Get a background check
- Contact previous landlords and current employers
Finally, you need to know how to interview people. When you have several attractive applicants, you might make your decision based on which person you trust most. Don’t forget that this person will become partially responsible for maintaining your rental property.
Find Reliable, Affordable Utah Landlord Insurance
Building owner’s insurance in Utah protects you from things like:
- Liability when someone gets injured on your property
- Income loss when a disaster makes it impossible for you to rent your property
- Equipment breakdown coverage that helps cover the cost of replacing essential items like HVAC systems
Contact Bethany Insurance to request a quote for your building owner’s insurance policy in Salt Lake. We’ll give you a competitive quote and explain what your policy covers so you can choose an affordable, reliable option that matches your needs.
