With rent prices peaking and the value of homes quickly rising, there has never been a more lucrative time to become a landlord. To many people, owning a rental property might seem like a prime opportunity for a steady income. However, there are plenty of other responsibilities and expenses that factor into the equation. If you’re interested in becoming a landlord, here are some things to keep in mind.
Is Becoming a Landlord Right for You?
Making the Commitment
Prior to even looking at properties, you have to decide if you’re in the right position to take on the responsibility of becoming a landlord. Most people think that, once units are sold and the checks start pouring in, their job is done. That couldn’t be further from the truth.
Landlords must be ready to accommodate and take care of every tenant in a rental property. It requires a great investment of both your time and money. However, if you still want to be a landlord and avoid the day-to-day responsibilities, consider hiring a property management company.
Before you commit to anything, be sure that you give your situation and current finances a comprehensive evaluation to determine if becoming a landlord is the right decision.
Be a Savvy Buyer
Prospective landlords tend to fall into the trap of acquiring low-cost properties by thinking that they can turn around a marginal profit. The sad reality is that, oftentimes, low-cost properties are that way for a reason.
If the property is a fixer-upper or in a bad neighborhood, getting a quality return on your investment might not be attainable. Therefore, make sure that you extensively research potential properties, looking at market history, other real estate comps in the neighborhood and the success of nearby rental properties.
Just like in your day-to-day purchases, it’s extremely vital that you’re a smart consumer when it comes to choosing a rental property to buy.
Save Wisely
It’s practically inevitable in every rental property that maintenance issues will arise and require landlord intervention.
Prepare for these situations by gradually setting aside funds for potential repairs or maintenance that your rental property may require. If issues aren’t resolved in a timely manner, local and state authorities may serve you with fines.
Lawyer Up
In order to ensure that your lease and rental property are legally sound, seek consultation from a lawyer or law professional.
Go over local and state laws and ordinances for real estate and rental properties. Also, have them scour your lease and homeowner agreements. You don’t want to lose your property or incur penalties because of your negligence. Do your homework to figure out and eradicate any issue that might arise.
Becoming a landlord is a great idea for some individuals, but not everyone. These common requirements and landlord responsibilities hopefully give you some insight on deciding if it’s right for you.
