Being a landlord can be a wise decision but it isn’t for everyone. Here are some things to consider before you put out a for rent sign.
How Is the Rental Market?
Just as you perform due diligence on a property and its condition, you should do your homework on the area’s rental market. Is there a steady stream of potential tenants? Some communities have an obvious source of tenants, such as a nearby university. Will the market support the level of rental income you envision? At a minimum, you want to be able to charge enough rent to cover the property’s mortgage, tax, insurance, and maintenance. If you’re unsure about any aspects of the market for a rental property or how much rent to charge, talk to a REALTOR® who’s familiar with the area.
Polish Your People Skills
Successful landlords find good tenants and retain them so both parties are content. If you’d rather not take on tasks like addressing complaints or maintenance issues, you’ll need to hire a property manager. Many REALTORS® specialize in property management and can take care of related duties including handling leases, managing funds, and screening applicants. Work with a REALTOR® who is knowledgeable about local and state laws and tenants’ rights to ensure you are in compliance.
Being Handy Might Not Be Enough
As a landlord, you will be responsible for the routine maintenance and emergency repairs on a rental property. Maybe you can handle annual touch-up work, but unless you’re well-versed in HVAC systems and your city’s plumbing and electric codes, you’ll need phone numbers for reliable repairmen.
You’re Always on Call
One nice thing about renting out a garage apartment or half of your duplex is that you’re never far away if there’s an emergency with the property, such as a burst pipe or a fallen tree. However, if you don’t live nearby, it may be difficult to keep an eye on the property to ensure it’s kept in good condition. This is yet another reason why it’s a good idea to work with a local property manager who can help look after your property.
Protect Yourself and Your Investment
The insurance coverage you need as a landlord is different than what you have as a homeowner. Landlord insurance can protect you and your investment property from loss of income in the event that the property becomes uninhabitable, like in the aftermath of a fire, or during a tenant-landlord dispute.
Get an Expert’s Advice
Finding a property, whether it’s for you and tenants or just to rent out, presents challenges that differ from just buying a house for you and your family. Use the services of a REALTOR® with a background in property management. She’ll help you guide you through the process, from deciding if it’s appropriate for you to become a landlord to finding properties that best fit your search criteria.