You have probably heard of someone who claims to have made millions by becoming a landlord. Buying and renting properties as a sole source of income may not be an easy journey. However, if you are looking for a solid investment on the side, then you should definitely consider becoming a landlord. It will, of course, require a lot of work and effort on your end. Moreover, you need to bear in mind that the process is not risk-free. There will be plenty of research you must do before investing your money into a property and turning around as a rental property. If you follow these tips and make a calculated decision, then you are more likely to become wealthy by being a landlord.
FIND THE RIGHT PROPERTY
This is perhaps the most important step towards making money out of being a landlord. Before investing your money into a property, you need to be sure it is rentable. Choose an area that is growing or is already well-established. Furthermore, it should be a safe neighborhood with access to public transportation and utilities. An extra step you can take is to meet the neighbors and make sure they are friendly and respectful people. Purchasing a property in a prime location will increase your chances of renting it out.
DON’T UNDERESTIMATE COSTS
So you’ve found the perfect home to buy and rent out, now what? You will need to plan your finances before actually closing the deal. Make sure you have enough to cover insurance, taxes if you have one. Don’t forget to leave enough money on the side for any repairs you will be making around the home. Plan the annual costs you will need to cover in case a tenant moves out as well as any unexpected repair and maintenance expenses.
ASK ABOUT RENTAL LAWS IN YOUR CITY
Remember that rental laws differ from one place to the next. Ask about the specific laws in your city to stay on the right side of the law. Furthermore, find a trusted lawyer who will be able to write out a contract that guarantees and protects your rights as a landlord. Talk to your lawyer ahead of time to discuss what benefits you would like to add in the contract. For example, it is recommended to add a clause that allows you or your property manager to visit the property every six months or so to inspect it.
HIRE A PROPERTY MANAGER IF YOU LIVE FAR AWAY
If you happen to live further away from your property, then hire a property manager to do certain tasks for you. They will be able to visit the property regularly as indicated in the contract. Moreover, this will guarantee that repairs are made as soon as possible since the property manager will inform you right away. Never postpone maintenance and repairs as the problem may become even more costly. Always take care of the property and keep it in perfect shape for the current and future tenants.
FINDING TENANTS
In order to find tenants, you can resort to placing online ads or hiring an agent to rent out your property. Although finding tenants is not exactly difficult, finding the right tenants is. You want someone who will be respectful of your property and follow the contract you have signed. It is also important to find a tenant who pays the rent on time. This is why you should run a credit check and a background check on the tenant before allowing them to rent the property. The process may take up some time and money, but it is definitely worth it. After all, you want someone who will be able to keep up with the rent.
REMEMBER IT WILL BE DIFFICULT AT TIMES
Don’t start the process thinking you will be making big money soon with little to no problems arising. Chances are, it’s going to be a bumpy ride, and that’s perfectly ok. There are even times where you may lose money due to costly repairs. That’s why it’s important to always plan ahead and get expert advice when needed. Becoming a landlord will take up a lot of your time and effort. However, if you do things right and remain professional, it will be a profitable investment.