People are always on the search for good investments and reliable sources of income. Becoming a landlord can check both boxes. If you’ve thought about investing in rental property but aren’t quite sure how to get started, look no further.
Here is an essential guide that covers what you need to know about becoming a landlord.
Buying Rental Property
So how do you go about buying a rental property? There are a few steps.
Picking An Area
You’ll need to choose a location that you’d like to have a property in.
Deciding What Kind Of Property
Do you want a single-family home, a collection of them, or an apartment situation?
Getting The Money To Purchase The Property
A rental loan allows you to purchase a property or properties. You can then pay the loan back using the money you earn from the property. Finding and buying property is the first step. Once you’ve secured it, there are some other expenses you’ll need to consider.
The Other Expenses
While purchasing the property, or properties, is usually the biggest total expense, there are some other expenses you should know about.
Initial Maintenance
You’ll have to decide if any work needs to be done to the property before it is rented out. This could be a cosmetic touchup or something bigger, like putting in a new AC or heating system.
Monthly/Yearly Maintenance
Properties require regular repairs and inspections to make sure everything stays up to code. You’ll also need someone who can be available to perform emergency maintenance.
Upgrading Appliances
You’ll need to replace things like stoves, fridges, and microwaves from time to time to keep them up to date.
Cleaning, Painting, And Repairing
Your property will need to be cleaned and painted between tenants to keep the space looking fresh and comfortable. You’ll also need to perform any necessary repairs to make sure things are working smoothly when your new tenant moves in. It’s important to factor in these expenses when calculating the cost of the property.
Landlord Obligations
The legal obligations of a landlord vary from state to state, but here are a few general duties you must perform.
Collecting And Storing Security Deposits
A landlord may collect a security deposit from a new tenant and hold it until that tenant leaves in case they miss a rent payment or damage the property. Each state has specific rules regarding the amount of a deposit and how it should be stored
Giving Out Owner Information
Landlords must tell the tenants who owns the property, who manages the property, and who has the right to make repairs and address complaints. This notice should be received in writing before the move-in date.
Delivering The Property To The Tenant
Landlords have to have the property ready for move-in on the agreed-upon date. If they don’t, the tenant could file charges.
Maintaining The Property
Landlords are required to keep the property clean, habitable, and safe for the tenants. They must perform repairs and live up to all building codes. This includes making sure heat, water, and trash disposal are available.
Liability
A Landlord is liable for everything listed above as well as anything listed on the lease. They remain liable until they notify the tenant they have sold the property or return the security deposit (minus any allowable deductions for non-payment or damage) to the tenant. There are a lot of responsibilities involved in being a landlord, make sure you’re up to the job before you take it on.
The essential points outlined in this guide can help you become a landlord and stay in good standing when you do. You’re well on your way to making a great investment and providing housing to a market that needs it.
