Buying property and then renting it out can be a great strategy for making money and investing in your future. Being a landlord can also be complicated and difficult at times, so it’s important to educate yourself on the process before you strike out into the world of property ownership.
Choose your property wisely
One of the most important considerations in rental property investment is location. Location determines how much your property costs, what kind of taxes you’ll end up paying, and what return you can expect on your investment in terms of rent.
Additionally, if you own property near where you live or work, you’ll find it easier to keep an eye on things. When you’re trying to rent the place out, you can meet with prospective tenants more easily. And when things need to be fixed, you’re never too far away to drop by and check in.
You also need to look for neighborhood where you can expect property values to rise. Look for other good properties nearby, new businesses opening up, and plenty of local investment in infrastructure.
Choose good tenants
You want to attract the best kind of people, and that starts by making your property attractive and pricing it well. Make sure you decorate and light the inside in such a way that potential tenants can really see themselves living there. Take attractive pictures and put them up online.
Check out listings in the nearby area so you know how much rent you can charge. Aim for rents in the median of prices for properties like yours. If rents are too high you won’t be able to attract or keep tenants. If prices are too low, you’ll attract more unsavory applications.
There is plenty of free landlord software out there that can help you find tenants. You can get online applications to stream the process of choosing tenants and online background checks to make sure there are no unpleasant surprises.
Be a good manager
Before you commit, understand that you have to keep up the property if you want to keep tenants in it and paying steadily. Things in the property will need to be repaired and maintained, and you’ll be the first call if something goes wrong at the house.
You also need to carve out plenty of time to show the listing to possible tenants whenever it’s standing empty. You can cut down on the time commitment by having people come to an open house, but eventually you’ll need to meet with serious tenants.
If you have several properties or invest somewhere too far from where you live, it could be worth your while to hire a property management company to oversee things on your behalf. They can keep up with repairs and maintenance, help you deal with tenant issues, and show the place when it’s empty.
Understand the law
The Fair Housing Act governs the relationship between tenants and landlords, and your state or municipality may have additional rules you need to know about. It always pays to know the law inside and out.
When you’re familiar and comfortable with rental laws and regulations, you’ll know how to protect yourself and what rights you have to guarantee to your tenants. You’ll know how to craft an excellent lease that makes the relationship clear.
Knowing the law also helps you know when you might need to hire a lawyer to protect you and your interests and when you can deal with issues by yourself. It also allows you to craft particular policies that cover your property and protect you without infringing any tenant rights.
Owning and renting out property can be rewarding in more ways than one. The key to making the most of your property is to plan carefully, know the law, and take good care of everything.