Some people become landlords because they’ve always been attracted to the industries, others get into it hoping to make some extra income, and a lot of people find themselves becoming landlords when they decide to move but don’t really want to sell their houses. Whatever the reason that brought you down this path, there are certain things every person in the process of becoming a landlord needs to know.
Picking Out Properties
This is the most crucial aspect of the entire enterprise. Choosing the wrong property will not only mean a (continuous) loss of money, it can also become a headache in terms of repairs and general upkeep. When it comes to this, not every property will do. You need to study carefully before making any kind of purchase.
Ideally you should be looking for a property that will give you a return of investment through rent. So even before you bid, you need to know whether its rent will cover all expenses. And we do mean all, as in, the initial investment, repairs, mortgages, taxes, and insurance. If you won’t be able to rent it at a cost that can cover all these, then you should keep looking. As a landlord, you really can’t settle for less.
You also want to take into account the overall location of the potential property as this could severely rank up the price for eventual tenants. Check out everything from the school district, and nearby grocery stores, to subway stations, nearby factories, and crime rate of the neighborhood. Really, we can’t stress this enough: research everything.
Have Everything in Order
A key element to make sure you get the most out of your investment is making sure everything is in order. You need to thoroughly review every document before signing. Check it twice, have a lawyer read it, get a second opinion, whatever you have to do to make sure you know exactly what you’re signing, and all your papers say exactly what they need to.
While you’re on it, study the law. Know exactly what’s expected of you as a landlord and what you can and cannot do. You should know how to draft a contract even before you go out looking for tenants. This is also the time when you want to make sure your property is in top notch shape. While the legal aspects are being sorted out, use the time to make sure your property is clean and functional and all repairs have been done.
Learn to Find Good Tenants
So, once all legal and functional aspects are done, is time to post your listing and learn how to find good tenants. The best tip we can give you regarding this is that creating an appealing, well thought-out and professional looking listing will attract serious potential buyers; while making a listing with grainy pictures and an amateur feel will most likely attract the wrong crowd. Really, don’t be afraid to invest on good pictures and a good design for your listing, it will be worth it and it’s not that expensive.
Another key aspect is taking the time to do a thorough background check. You want to be able to see credit, talk to previous landlords, and of course, see proof of income. Don’t be afraid to be picky, it can save you from choosing the wrong people.