Renting property can be a profitable business, if you do your homework first. Before you decide to become a landlord, learn a little more about what’s involved in getting into the rental business, and if it’s the right fit for your lifestyle.
Financial Investment
First and foremost, renting property involves a sizable financial investment. A landlord must make sure they have the resources to commit financially for both the initial purchase of property and upkeep. Not counting this cost can quickly sink you into debt rather than filling your pockets with cash. If you’re not sure where you stand financially, set up a meeting with your bank to see what your options are.
Time Commitment
Landlords should be ready to commit a lot of their time to the business. Time is required to deal with new and existing tenants, maintenance needs, hiring extra help, and keeping financial records. Being a landlord is a full time job and then some.
Location and Type of Property
Laws and Regulations
Landlords have to comply with local laws and regulations for renters, as well as ensure their buildings are up to code. Read up on the governing laws that regulate landlord-tenant relations for your town, ensuring that everything you do as a landlord is in compliance with the law. Understanding your responsibilities and rights will save you a lot of potential headaches.
Proximity to Your Rentals
It’s a good idea to live fairly close to your rental property. A landlord may sometimes be needed at odd hours, or may have to get to a building in a hurry in case of emergency. Maintenance and management is also much easier if you don’t have to drive an hour across town to get to your property.
Like any other business venture, having knowledge is crucial to the success of a rental business. Do not plunge into becoming a landlord blindly. Arm yourself with as much knowledge as you can about renting property, learning how the whole business works. Taking a basic business management course at a local college will also be a huge help.
Being a landlord is not an opportunity to sit back, relax, and expect cash to magically flow into your bank account without much work. Although it can be quite lucrative, it is a serious business venture that requires the commitment of your finances and time to be successful.