What you should know Before Becoming a Landlord: Top 3 Things
Thinking of becoming a landlord? Investing in real estate and rental properties can be a great way to provide long term cash flow, but it can also come with some headaches if you have late paying tenants or other unexpected issues. As with any other business, there are things to consider before taking the plunge and investing in that duplex or single family unit. Here are the top 3 things other landlords in the industry wish they had considered before starting out.
- Budget for vacancies
In a perfect world a landlord would buy a property, find that amazing tenant that keeps the place neat and tidy and always pays their rent on time and stays forever. Unfortunately, that is not the way it goes in most cases. It’s important to budget for the down time that your property sits vacant in between tenants.
- Consider a property manager…or not
Some landlords prefer to manage their own properties. Others would prefer to let someone else handle the ins and outs of rent collection and other common tasks. When considering which one of those landlords you may be, it might be wise to look at the amount of properties you have or if hiring a property management company to do your dirty work would be cost effective.
- Know where you want to buy
Area can make or break your business. Buying a house with a super low price ticket due to the area it’s in might not be the best idea. You may not be able to charge as much for rent in certain areas that you would in others. It’s also wise to consider whether or not the property is close to public transportation or close to desirable businesses. All of these things can be factored into rent as well as making sure you’re attracting the kind of tenant you want.