Becoming A Landlord
Tips on Becoming a Landlord
If you are thinking of becoming a landlord there are many things to consider. Along with more annual income, you will now have the responsibility of caring for and maintaining another house hold other than yours. There are problems that will occur when renting to individuals and it is a good idea to go over these problems and make sure you have a way to resolve each one.
When you are becoming a landlord and want to rent more then one apartment or home you must also think about the possibility of no one renting them for an extended period of time. After a lease or contract is up, it may take some time to find a renter to rent the particular space. So you must never depend on the rent alone for financial security.
The first thing you must do is add all of the costs to run the rental. Include things like property taxes and the trash service. Also add in the cost of maintenance and if someone will have to mow the lawn and clean or paint the rental. Add up how much it will cost to travel to and from your rental property and how much repairs throughout the year will cost. All of these types of things have to be weighed against how much money you will claim as profit.
Next decide what you will charge for the rental property. For instance, if the unit is a large three bedroom, find out what the going rate is on average for your area. You will also have to include any luxury items such as a fire place or internet service into the cost of the rent.
When you have considered how much it will cost to maintain the property and you will still make a clear profit, you can then move on to the next steps on becoming a landlord.
Before you start to choose renters you must make up a lease agreement for everyone who will be renting form you. With this agreement you can avoid most legal matters when your tenant reads what is expected of him. The agreement will state how much the rent will be every month and how long you plan on leasing the unit out. You can also be clear on any rules that cannot be broken and what to expect if they are. For example, if you do not want any pets to be on the rental property it can be noted in the rental agreement. After the tenant signs the agreement it is a legally binding document.
There are laws that say that a person becoming a landlord and preparing to rent an apartment or home cannot discriminate on who he rents too. But you can check the credit rating and references of anyone interested in renting your property. Many landlords have had to go actually take action against renters who do not pay their rent. They have to file court documents and after a period of time they will finally get an eviction notice to get the offenders off of their property. If you are considering becoming a landlord, you must know this is a possibility. So any one you are thinking about renting to should be thoroughly checked out. If you think for a moment that they will cause problems with loud noise or messy conditions, you have the right not to rent to them.
If you live a distance away from the property it is also a good idea to hire an onsite manager or someone your renters can contact close by in case of an emergency. Any messages or on site problems can be directly addressed from the site and you can keep a closer eye on your rental units. Your renters will also feel better about being able to have a problem resolved immediately.