Are you thinking of becoming a landlord? It can be a great way to provide a regular income from the property you own.
However, there are some things you need to know before taking in tenants.
In this blog post, we will discuss eight things that every would-be landlord should know. By knowing these things, you can make becoming a new landlord as smooth and profitable as possible!
1. Decide if You’re Ready to Become a Landlord
There are many pros and cons to becoming a landlord. On the plus side, rental properties can provide a steady stream of income and can appreciate over time. Being a landlord also allows you to be your boss and set your hours.
However, there are also some significant drawbacks to consider. For example, being a landlord requires a substantial amount of time and effort. You’ll need to
- Screen tenants
- Collect rent
- Handle repairs and maintenance
- Deal with problem tenants
In addition, you’ll be responsible for paying property taxes and insurance. So before you decide to become a landlord, make sure you are prepared to handle the challenges that come with the territory.
2. Choose the Right Property
When you’re ready to become a landlord, it’s important to choose the right property. The size, location, and condition of the property can all have an impact on your success as a landlord.
For example, a large apartment complex in an urban area is likely to require more maintenance than a smaller house in a suburban neighborhood.
Likewise, a fixer-upper will likely entail more work (and expense) than a turn-key property.
Before you purchase a rental property, it’s important to do your research and make sure that you’re choosing the right one for your needs.
Otherwise, you may find yourself struggling to keep up with repairs or facing vacancy issues. By taking the time to choose the right rental property from the start, you can set yourself up for success as a landlord.
3. Get Your Finances in Order
One of the most important things to do when becoming a landlord is to get your finances in order. This means having a clear understanding of your income and expenses, as well as your overall financial goals.
You’ll also need to make sure that you have enough money set aside to cover repairs and unexpected expenses. Landlords often recommend setting aside a “rainy day fund” equal to three to six months’ worth of expenses.
By getting your finances in order before becoming a landlord, you can help reduce stress and ensure that you’re prepared for whatever comes your way.
4. Understand the Real Estate Laws
There are several laws and regulations that landlords must comply with, so you must understand them before you get started. These laws cover everything from fair housing practices to health and safety standards. Familiarizing yourself with the law will help you avoid any legal problems down the road.
For example, the Fair Housing Act prohibits discrimination in housing based on:
- National origin
- Familial status
This means that you cannot refuse to rent to someone based on any of these protected characteristics. You also cannot set different terms or conditions for different tenants based on these characteristics. If you violate the Fair Housing Act, you could be subject to fines and penalties.
The Occupational Safety and Health Act (OSHA) requires landlords to maintain a safe and healthy environment for their tenants. This includes ensuring that no hazards present could potentially cause injury or illness.
Landlords must also provide proper
- Garbage and pest control
Failure to comply with OSHA standards can result in hefty fines.
Knowing and complying with the law is an important part of being a landlord. By understanding your obligations, you can help avoid any legal problems down the road.
5. Finding Tenants
As a landlord, one of your most important duties is finding good tenants. You’ll want to screen your applicants carefully to ensure they’re responsible and have a good rental history.
Running credit checks and contacting previous landlords can help you get a better sense of an applicant’s character. Furthermore, it’s important to set clear expectations with your tenants from the outset.
Be sure to go over the rules of the rental agreement and make it clear what your expectations are in terms of rent payment, property damage, and noise levels. By taking the time to find good tenants and setting clear expectations, you can help minimize conflict and ensure a smooth renting experience for both parties.
6. Be Prepared for Repairs and Maintenance
As a landlord, it’s important to be prepared for any repairs or maintenance that might need to be done on the property. This can include everything from fixing a leaky faucet to dealing with major structural damage. Having enough money set aside to cover these costs is essential so that they don’t come as a surprise when they arise.
Making sure your property is in good repair is important for both the Tenants and you as the landlord. no one wants to live in a place that is falling apart, it reflects badly on you as the owner.
If something needs to be fixed, do it promptly so that it does not become a larger problem. Being proactive about repairs shows that you care about your tenants and their living situation. It is important to maintain the property so that it keeps its value and does not become a liability.
7. Consider a Turnkey Property
A turnkey property is a fully-furnished rental property that is ready for occupancy. Turnkey properties are usually purchased by investors who are looking for a hands-off way to generate rental income. There are several benefits to owning a turnkey property.
Turnkey real estate investments are often located in desirable neighborhoods or resort areas, making them easy to rent.
Finally, turnkey properties typically come with a management team in place, which takes care of all the day-to-day tasks associated with owning a rental property. For these reasons, turnkey properties can be an attractive option for investors who are looking for an easy way to generate rental income.
Becoming a Landlord: Start Today
Becoming a landlord requires careful consideration and planning, but it can be an extremely rewarding venture. Understanding your obligations, finding the right tenants, and staying on top of repairs are all necessary steps to becoming a successful landlord. By following these tips, you can start becoming a landlord today!
Good luck and enjoy the journey!
Are you looking for more investment tips? Check out the rest of our finance section!