The booming investment field has pushed the idea of becoming a landlord as a way to make easy money. Today, let us look at the techniques of what a good landlord is and find out if it is a great opportunity to make money.
The thought of becoming a landlord is a familiar notion to millions. You simply get the mortgage money, purchase property, and rent it out to someone. The income from the rent will cover the mortgage payment and the property value rises, thereby increasing your investment.
However, it is not quite that easy. There are many things that can, and often does, go wrong. The first thing you should consider when thinking of becoming a property mogul is how much money can you afford to invest in the venture. Other important considerations are the type of risk you are prepared to take and how much time you can spend looking out for the investment.
You should have a good business plan of what you want in you property business. Consider how much you want your return to make and over how long a period of time. Property prices and incomes do not always increase and you should consider how this would affect you should property values begin to fall.
Now that you have decided to purchase the property, you should consider your responsibilities as a landlord. You will need to find tenants and manage the various maintenance and daily needs of the property. There are also many legal requirements you will need to be aware of. That is why many investors hire agencies to manage the property for them.
You will need to decide if you want to take care of the maintenance on the property or if you will be hiring specialists. Often a landlord will decide to pay an outside contractor to maintain his or her property while it is being rented. Some tenants may not treat your property with care, so you will have to set aside a budget to take care of the costs of repair.
Here are a few things that you should not do when investing in the property.
Buying property for investment in the worst possible area is a sure way to lose money. The amount of rent you will be able to charge is limited by the location of the property.
Putting in the best appliances and fixtures, trusting your tenants to take good care of them. You should buy from recycled construction shops or yard sales to help save on costs.
Not ever checking on your property or asking neighbors what they see happening is a good way to lose money from tenants who conveniently leave while still owing you two months rent and a demolished property unit.
Failing to screen your tenants will leave you with unnecessary repair expenses, stress from upset neighbors calling, lost income and possibly even legal problems.
Not learning any management skills or learning your legal responsibilities is a sure way to lose money and tenants. You should be organized and reliable. If a tenant has a problem, you should respond quickly to resolve any problems. You should learn to keep accurate bookkeeping records and keep written notes on all correspondence. You should have good communications skills, either with your tenants or the management team you hire to take care of your property.
Becoming a landlord is not as simple as many have been lead to believe. Your success depends on how well you plan from the beginning. Take the time and do some research to make your investment worth while.