Becoming a landlord is one of the solid ways when it comes to methods of investment. A landlord owns a residential income property, and it’s one of the most popular real estate investment option. It had also risen in popularity because of several real estate tv shows such as HGTV. But what are the important things you need to be aware of before you decide that being a landlord is for you?
Educate yourself in the ethics and laws of renting
Understand about security deposits and other intricacies that comes with it. It’s also essential for you to know housing discrimination laws. This is something that could cost you a lot when you unknowingly fall into the trap of being unaware.
Checking your properties periodically
If you’re just starting out, you may want to live within or nearby your property for convenience’s sake. It’s important to check your properties periodically. The regulation is commonly stated in the legal documents signed when you take in your tenants. Inspections can be done in three months intervals. This is where you inspect closely how your property fares with your current tenants as renters.
Remember that the returns take time
The residential income property scheme is definitely not quite like the “fixer uppers” scheme. It is clearly not a get rich overnight business model. It takes time and effort in order for a property to make its returns. Being a first time landlord, you may feel impatient. So have a realistic expectations. Talk to other landlords or go to a forum if you’re curious how much a landlord makes a return on their property investment.
It’s important to know how you can enforce the rules to your tenants politely. This is essential to make sure that rents are paid on time. The relationship between tenants and landlords is supposed to be just like any other business relationships. But it’s a bit tricky. If you live nearby or you live in the same building, you’re very likely going to see your tenants every day. Even though you’re good friends with your tenants, don’t let that as a reason for you to allow late payments.
Consider repairs on your expenses
Can you do your property fixing by yourself? This is often overlooked by first-time landlords. Things such as plumbing and repairing certain fixtures of your property will cost you money. It would be so much cheaper if you can do everything by yourself when you’re just starting out. However, knowing the right person can help a lot. Contractors can get expensive over time. So if you have connections with them, consult your intention and come to a win-win situation for both parties.
Do a background check
Knowing the relevant background of your potential tenants is one way to ensure that you will get your investment returns. Check their credit score in the tools available online. However, remember that credit score is not everything when it comes to determining whether someone is a good tenant or not. Students for example, may not have enough credit scores that could help you determine whether to decline or to accept a tenant. It’s a good idea to find more about your tenants by asking them yourself.