07.06.09

Eight Things You Should Consider Before Becoming a Landlord

1. Be honest about how much work, time, energy and money you are willing to put into being a landlord. If you’re ready to put in what it takes, becoming an owner of rental property can be a great way to build wealth over the long haul.

2. Look at the overall market conditions where you live or plan to invest in rental property. Be aware of the potential risks and benefits for that area. As with any investment, do your research and plenty of it before you hang out a sign that says, “FOR RENT.”

3. Watch out for misleading or overly optimistic television shows that make becoming a wealthy landlord a matter of quick and easy work. You can make significant money in the rental business but it takes time and plenty of sound preparation.

4. Consider your goals in becoming a landlord. Are in it to make money quickly or willing to stick around for the long haul; if you want or need a fast return on your money, then there are other investment strategies that will probably work better for you. Consult with a qualified investment advisor and make a considered decision.

5. Make sure you are ready for the responsibilities of being a landlord. Consider factors like how much you really like talking to people you don’t know in order to show your rental property and if you are willing to properly screen all potential new tenants thoroughly.

6. Remember that things can go wrong and often do at the most inconvenient moments. Are you ready to get up and deal with emergencies at your rental property at three in the morning? Are you prepared to deal with evictions if you need to? It can be unpleasant when it happens and you need to be prepared.

7. Make sure you do your financial homework. Investing in real estate takes all the same care and consideration that buying your personal residence does if not more. Make sure you get the facts before you buy. You will need to do the numbers on all kinds of costs, including repairs, maintenance, insurance, advertising, book-keeping and more.

8. Consider hiring things out that you know you’re not good at. If you are a terrible accountant, find one. Not handy with a hammer? You’ll need good contractors. Some people hire property managers to handle most all of the day-to-day business of running their properties. This can save you headaches and time but will eat away at your profits too. Be honest with what you can really do and do well.

source: Apartments.com