There are quite a few situations for first time landlords that ask for different approaches. Homeowners who managed to buy a larger place, but also need to wait for selling their first property. There are also the situations where investors found a great property that can be used to generate stable income. Whatever the need, these tips will give you the basics of what you can do to get things started:
• You will first need to set your timeline so you can get ahead in an organized manner. In some cases people may find a way to capitalize on their property for a useful monthly rental income that happens to be way above the building’s costs, however more often that will not be the case. If you rent out a home or apartment you may win more from it in the long run, far more than you think as you pay off its mortgage eventually. Ten or thirty years from this moment the market might be very different, so you will need to consider the long run ahead and save your finances. Situations and markets change so you will need to adapt accordingly.
• Another thing you will need is the proper insurance for your property. You may need to have a lawyer so they can give you useful advice about the legal requirements for being a landlord in your city or country. They can also provide assistance with problematic tenants, should you need such assistance. You will also be responsible for repairs in case something goes wrong. In most ideal conditions you will have a chance to set your rent high enough to be able to cover all of your monthly expenses. In others, not so much so you will need to budget properly if you want to stay on top with your monthly rent. You will need to balance out between what you need for your upkeep and what you can gain from the rent.
• You will also need to make your own checklist before your new tenants move in. Depending on your location the rules may differ. For example New York landlords need to repaint the walls once every three years. If a tenant happens to move out before that time has passed they may be required to pay for a part of the repainting process. Turnover is usually a good time to check for any potential hazards with the property that need to be addressed. Make a list of what may need attention and use it to fix things every once in a while.
• You will need to check out sample contracts to understand how to detail your contract. It all depends on the overall idea you have about the rental itself. For example some people pay for a month’s rent with quarters, pay the water bill themselves and allow the tenants to pay for their electricity and other expenses. You will need to consider penalty fees for late payments or something similar that suits your landlord style.
• You can allow yourself to be picky with your tenants to a certain degree. Avoid renting out to relatives, as this will be far from an ideal business situation. Work colleagues and acquaintances can make good tenants, as they will be someone you know, but not someone you feel obliged to keep around your property even if they can’t pay. You can never legally discriminate against religion or race, but remember you don’t have to pick the first tenant that comes around.