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How To Make Money As A Landlord: A Simple Guide

Housing-Market / Buy to Let Apr 05, 2022 - 05:14 PM GMT

By: Steve_Barker

Housing-Market

If it's done right, being a landlord can be a very profitable endeavor. However, it's not as simple as just buying a property and sitting back, collecting rent checks. There are lots of things to consider beforehand, and you need to know what you're doing. In this article, we'll discuss the basics of how to make money as a landlord and give you some tips on how to get started.


Do Your Research

You'll need to stay up to date with current legislation and be familiar with the rights and responsibilities of both landlords and tenants. You'll also need to know how to protect yourself financially. If you consult a specialist lawyer or business consultant, they can advise you on what to do.
The internet is a great place to start, whether it's for information or specialist professional help. You can see from this URL that landlords are asking complex questions such as whether SB 91 affects AB 1492, and what are exemptions to the latter. You can also read articles on how to get renters to renew their lease, and how to save money by getting repairs and maintenance right.

Choose The Right Rent

You don't want to set the price too high or too low, as it will result in either fewer tenants or lost profits. If your property sits vacant for a month at a high rent, that's a month of lost income. Be mindful of how much you're asking and be prepared to lower the rent if needed.

The key is to choose the best rental price possible whilst still covering your costs and making a profit. Your costs will include the mortgage payment, insurance, taxes and any repairs or maintenance that may be needed. To find the sweet spot, research your local market and see what other landlords are charging for similar properties.

Choose The Right Tenants

One of the most important aspects of being a successful landlord is choosing the right tenants. You need to make sure that they're responsible and will take care of your property, and that they can afford to rent from you. To achieve this, you should perform background checks on potential tenants, to ensure that they're credit-worthy.
You should ask for references from peoples' previous landlords. They can give you an idea of what this person was like as a tenant in the past. You can discover whether the person paid rent on time, caused any damage to the property, or was generally difficult to work with. If you're having trouble finding someone to reference, consider using a service like Tenant Background Check. They'll provide you with detailed reports on potential tenants' credit scores, rental history, and criminal backgrounds.

Set Clear Rules And Guidelines

By setting clear rules and guidelines for your new tenants to follow, you can minimize any potential conflict or problems down the road. Some things you may want to consider including are:

  1. The amount of rent they're expected to pay on time each month
  2. Whether they're allowed to have pets
  3. How often they're allowed to have guests over
  4. What kind of repairs they're responsible for
  5. How much notice they need to give before moving out

When putting these things into your rental agreement, make sure you're familiar with your state and local landlord-tenant laws (as they can vary quite a bit). You don't want to end up in a situation where you're not following the law and risk getting penalized.

Get The Right Insurance Coverage And Be Selective With Your Properties

Landlord insurance is essential if you want to protect yourself against any potential damages or lawsuits. Make sure that you have adequate coverage in case of an emergency, and that the policy includes liability insurance, which will protect you if your tenant damages the property.
Not all properties are created equal when it comes to renting them out. Some will bring in more money each month than others, so you need to be selective with the properties you rent out. Think about what type of tenant you want to attract and find a property that matches that criteria. For example, if you're targeting young professionals, a studio apartment in the city center would be a good choice.

Miscellaneous Tips

And finally:

  1. Get involved in the local community by attending tenant meetings or joining a landlords' association.
  2. Have a fund set aside for emergencies, so you can deal with them quickly and efficiently.
  3. Maintain your properties well (including making them energy-efficient) and fix any issues promptly.
  4. Know when it's the best time to sell if the property is a long-term investment.

It's worth going online and reading more about each of the areas we've discussed today. By acting wisely, you'll be able to make the most of your role as a landlord, benefiting your tenants, and making money in the process.

By Steve Barker

© 2022 Copyright Steve Barker - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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