Becoming a landlord is not as simple as buying something and collecting rent. You have to consider tax implications and other important factors in becoming successful.
In fact, you’ll need to know what to prepare before you put an ad out or prepare the property for new tenants. Otherwise, you could get into a lot of trouble with the IRS or have problems with upkeep.
It’s not something to take on haphazardly and without thought. So, here’s what you need to know to become a landlord.
Keep reading!
1. The Cost
You need to factor in the high cost of being a landlord. This includes the cost of advertising your rental, screening potential tenants, making repairs, and paying taxes.
You need to be aware of the legal requirements and responsibilities that come with being a landlord. These include things like keeping the property in good repair and following fair housing laws.
2. The Commitment
Even if you opt to hire a professional property management company, you will still need to stay involved and aware of what is happening with your property at all times. You need to be prepared to deal with difficult tenants, should they arise.
Landlording is not a passive income stream, but rather an active and hands-on business venture. If you are not prepared to put in the work, it is not the right investment for you.
To help you better manage your time for everything, it’s a good idea to get an Appfolio. This system software helps you manage your rental properties.
To know more, visit Balance Asset Solutions’ website and read about this comparison of Appfolio vs. other applications.
3. The Potential for Problem Tenants
There are a few things to consider before you become a landlord in relation to the potential for problem tenants. You need to be aware of potential problem tenants.
By taking these precautions, you can minimize the risk of having problem tenants and the headache that comes along with them.
- Consulting with an experienced real estate attorney
- Screening potential tenants
- Requiring a security deposit
- Evicting a tenant if necessary
4. The Liability
As a landlord, you are responsible for the property and any injuries that occur on it. This includes maintaining the property in a safe condition and ensuring that any potential hazards are addressed.
You will also need to have insurance in place in case of any accidents or damage to the property. You also need to be aware of the financial risks involved.
5. The Maintenance and Repairs
As new landlords, you are responsible for maintaining and repairing your rental property. This can be a significant expense, so you need to be prepared for it as well.
Making the Right Decision to Become a Landlord
Before you become a landlord, there are a few things you should consider. First, are you prepared to be a responsible party for another person’s home? Second, do you have the financial stability to take on the role of the landlord?
And third, are you willing to deal with the potentially stressful situations that may arise? If you can answer yes to all of these questions, then becoming a landlord may be the right choice for you.
Just be sure to do your research and be prepared for all that comes with the job.
Did you find this article helpful? Check out the rest of our blogs!