If you have an extra property or looking to purchase one, you might be considering renting it out to tenants to give yourself an income. Having a rental portfolio is also a way to invest in the long term, giving you the option to sell and rent properties to give you a nest egg for retirement. If you are looking to become a landlord, there are things you need to consider before starting. This guide gives you some tips.
Be Prepared to Work
While being a landlord might bring up images of not having much to do other than collecting your rents each month, in reality, there is plenty of work involved. You will have to do your research and know the laws regarding tenancy agreements and landlord responsibilities and also ensure you adhere to them. You will be a point of contact for a tenant who has a complaint, and a responsibility to make sure that a property is in good enough condition for a person to live in comfortably. If you don’t want to take on that responsibility, there are property management firms out there that can do it for you, but this will be for a fee that might not make it worth your while.
To be a successful landlord, you need to be prepared and willing to put in the necessary work. Otherwise, your tenant will be looking for new places to live.
Work out your Costs
You can earn a living by being a landlord, but you do need to work out your costs. If you have a mortgage on the rental property, you need to make sure that what you get in rent each month exceeds the mortgage repayments. This is so that you have some extra left over to pay for any maintenance costs or damages to your property, as well as paying for property taxes. You will also need to take out landlords’ insurance, so factor that into the amount you charge for rent also.
If your property is in an area where the highest amount of rent you can charge is not enough to pay for all the expenses, it is probably a wise idea to sell the property and look to buy in a different place where rental prices are better.
Repairs and Maintenance
As a landlord, you are responsible for the maintenance of your property, including internal works such as heating and plumbing repair. Any old or poor pipework should be replaced, otherwise, it could cause a number of problems, and you would need to find a water removal service to repair any damage. Issues such as damp should be thoroughly fixed if you want to keep a tenant in your property.
Other repairs might arise as a result of bad weather, such as replacing roof tiles or removing branches from damaged trees on your property.
Have regular inspection and a schedule of works to do each year on your property, such as clearing the guttering and painting wooden window frames, to keep the building in good condition. Doing so will save you money on more substantial repairs later.
Pick the Right Tenants
Having good tenants is one way to keep the stress levels to a minimum when renting out your property. Ideal tenants are in regular employment, don’t have any debts, and are genuinely looking to make your property their home. It is worth doing a credit check on applicants, as well as conducting an interview. You can also ask them for references from previous landlords.
Have a Clear Lease
Make the terms of your agreement with your tenants clear, so that there is no doubt about the rules. For example, specify if you allow pets or not, or whether the tenants are able to decorate to their own style. Make it clear, and there won’t be any difficulty as the tenancy progresses.
A good business has effective communication with clients, so a good landlord must also be able to communicate with tenants. It means listening to them when they need help with something that is to do with your property, and performing any repairs quickly and not leaving tenants waiting. A well-kept property and an open landlord is something that will keep your tenants wanting to live in your property, and that also saves you the hassle of having to find new ones once a lease is up for renewal.
Becoming a landlord is a good way to earn an income, as well as saving for the future. If you are organized and run your rental income like you would a business, then you are always prepared and able to contend with any issues that may arise.