Owning an investment property is a huge achievement. However, while the idea of renting out your property as a new landlord can be both exciting and daunting, you need to set yourself properly to guarantee great returns on your investment.
Suppose you are new to the property rental scene. In that case, there are several new developments in Nairobi and even around Kenya you should be abreast of and pitfalls you must avoid to ensure you protect your investment and maximize your profits.
These tips will not only strengthen your base in the property management industry but also set you up on the right path to becoming a professional landlord!
1. Get Maximum Value For Your Property
You need to treat your property as a business, with the rent being your revenue. Therefore, not only should you ensure you maximize your rental returns, but you must also strive to see that rents are paid regularly and on time.
You will have other expenses to cover – insurance, maintenance, etc. – so do not allow flippant tenants to affect your investment property cash flow. Of course, you need to bear in mind that the rental amount you will charge is determined by your property’s value, size, and location.
2. Make Adequate Tenancy Checks
There are no two ways about this – your tenants can either make or mar your investment! So many excellent properties have been ruined due to negligent actions made by bad tenants. To enable seamless tenancy, endeavor to run thorough checks on prospective tenants.
Don’t discard this task as unnecessary. If you are wondering what you need to look out for, consider their rental history, payments record, employment history, and, very crucially, their social media presence. These will give you an incredible insight into who you are about to let into your property.
3. Consider If You Would Accept Pets
There are pros and cons to virtually everything, including allowing pets on your property. This is a personal decision you will need to think about before opening your property up for lease.
To help you with your thought process, here are some points to consider:
Pros of allowing pets:
- There is greater demand for pet-friendly properties
- Pet owners are likely to stay at properties for a longer duration
- You can include clauses in the lease agreement to protect your property from damages caused by the pets
- You are less likely to have vacancy periods since you’d have a large pool of available prospects to choose from
Cons of accepting pets:
- Pets can damage the condition of your property
- Applicants with pet allergies might write a pet-friendly property off
- Some pet odors are pretty offensive and may be difficult to remove
4. Evaluate Other Property Revenue Opportunities
Depending on how invested you would like to be with managing your property, you could also explore other means of making income from your investment. Apart from letting the house for a long-term lease, there’s the option of a short-term lease, e.g., Airbnb. Speak to one of the best property agents in Kenya about all your options and make the best decision for yourself.
5. Know Your Rights And Responsibilities As A Landlord
This particular point is very vital. There are laws guiding tenants, landlords, and agents in Kenya.
If you’d be managing your property yourself, you must have a sufficient understanding of these existing land laws to avoid putting yourself in a fragile or costly situation.
You can start by going through this resourceful piece on the Land and Tenant bill in Kenya. This information should guide you on what you can do, and most importantly, what you can’t do as a landlord in Kenya.
6. Don’t Forget To Make Regular Inspections
The necessity of frequent inspections cannot be overemphasized as they ensure required maintenance does not go unnoticed and help you assess whether your investment property is being cared for by the tenants. Your property must always be in perfect condition to attract the best tenants.
The spacing between your inspection rounds is entirely up to you, but 6 months would be perfect. Check for building damages like wall cracks, squeaky floorboards, soiled paintings, etc. You may put the condition of your home in mind when considering rent increment or whether to extend tenants’ leases in the future.
7. Don’t Overspend On Property Renovations
This is one pitfall many landlords fall prey to. While renovating your investment property, you need to ensure you do that with your return in mind. You can skip some parts that are not important and spend your money where you are likely to get the greatest return.