Owning a rental or two may be a great way for you to bring in some extra income for yourself without really having to work for it. You will always hear about your buddies that are renting and how they make a frightening payment toward rent for their place. Why not get this income of your own while you gain all the equity as the renters pay down to your note. Rental can however be a lot of work whether you have one or two homes you should take time to review the pros and cons before you make your purchase confirming that this is the right business for you. While you review the pros and cons remember to also consider the finer points of being a landlord.
- Carefully pick your new tenants. Be sure that when picking a new tenant you always run a background check and ask a series of questions that will help you learn more about the people who will be living in your house. Having a "bad" renter can ruin your rental experience before it has even really taken off. If you get stuck with rough renter you may end up having to gut the house and starting over from the beginning , at that rate it makes it really hard to have success at land lording.
- Considering rent collection. Think about how you plan to collect payments from your tenant. It is smart to think about this decision before time so that you don't run into a situation where your tenant can't or won't comply to the process. There are now many systems online that are easy for tenants to use. Once the process has become electronic there is no worrying about getting the check in the mail every month.
- Getting comfortable with legal stuff. Make sure to know what your obligation to your tenants as well as the state laws regarding the withhold of rent due to repairs that remain unfixed. Know if your tenants can crash in a hotel on your dime while repairs are taking place as well. It is smart to find a good real estate attorney that can help you draft a rental agreement that protects both you and your renter.
- Plan repair and upgrades. It is best to have any repairs and upgrades finished before anyone moves in so that everything is easier to reach and less of a hassle. Have a plan to make sure the problems are fixed properly the first time so that there isn't a reoccurring issue. When upgrading choose materials that are durable and easy to take care of, treat the home as an investment and design it in a way that you'll get the most for your money.
- Eviction. This is probably the worst case scenario but you have to consider the process for how you're going to deal with eviction. You also have to make sure that you will be prepared to handle these types of situation no matter what the reason for missing payments may be.
You will realize that being a landlord has its up and downs and requires a lot of general knowledge that's hard for one person to maintain. But there are professionals that are willing to help you along the process. We hope that these tips will help prepare you for your next step in renting.