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Becoming a First Time Landlord: The Key Factors to Consider

If you have invested in rental properties, it is important that you know the basics of being a landlord. You should not make the decision to go into this venture without making any research beforehand. There is absolutely no doubt that the rental business is a highly lucrative and rewarding endeavour for its practitioners. However, this is more so for those who have the correct knowledge and skill to navigate through the many responsibilities and factors that are necessary for success in this highly competitive sector. Thus, for first-time landlords who are figuring this all out very quickly, this article will help you along the road to more success and less stress!

But like all other skills, real estate rentals could also be patiently learned and the knowledge gained, applied in going about renting out any properties with a view to earning substantial income over time. So what are these key points that you should consider before jumping in to rent out your property for the first time?

Know Your Rights

First, you have to get to know your tenant’s rights, this way you know when you can press an issue and when to stop lets you go beyond your boundaries. Laws will vary depending on where your rental property is located but one common right concerns the timely payment of rent. This means that if you have agreed upon a certain date when the rent is due, the tenant should be able to stick to that agreement.

You must also be notified of any damages and disrepair to your property, and you must be paid any increases in leases as stipulated in the rental contract.

Get it in writing

Contracts are just as important for tenants as they are for your safety and financial security. Make sure to outline exactly what you expect from your tenants down to the last detail. Leaving nothing out will avoid a lot of mistakes and miscommunications in the future. Document the state of your rental apartment or house before each tenant (just like tenants should also do) to eliminate possible liabilities or damage costs later.

Demand Good Care of your Property

As expected, it is your right to demand and ensure that your tenant takes good care of your property. It is within your right to set limitations to how they use things like the backyard. For instance, you might not allow them to hold a wedding or other functions in the backyard as it can damage your property.

Money Management

If you want a high-yield, low-risk career, this is unfortunately not it. From purchasing a property to fixing it up, finding reliable tenants to covering the costs of things that inevitably go wrong you will not necessarily be making huge amounts of money right away with this property. Your tenant’s rights might mean extra obligations for you. For instance, your tenant has the right to live in a property with working amenities like running water, heating, and electricity. This means that you will be responsible for any repair that the property might need. Things will break, items will need to be replaced and carpets cleaned; insurance needs to be purchased and taxes paid. Keep a financial eye out for ways in which you can save, but for the first bit of time make sure you are able to cover all your necessary costs of being a landlord.

Know the rules

Know and establish the rules of your building as well as conform to the municipal, district, and state housing regulations that are in place. Make sure your building is up to par before a potential tenant even gets inside. You may be requiredthings likeperiodic cleaning, repainting, or inspections for health and safety, so make sure you know when those need to occur and get on it before it is too late. By making a list of things you know you have to do every year or every time a tenant moves out you will have a blueprint for property management.

Self-Management

You might also have to get up late at night to attend to a plumbing problem within your property as soon as the tenant reports it. This means that you have to invest a lot of time into being a landlord. The tendency as a first-time landlord is to opt for self-management and operations of your new rental business, as it may save you costs and put you in the driver’s seat. However, you may not have the time to attend to these obligations. You can seek the services of a property manager or estate agency to handle the day-to-day operations of your property, without too much hassle. There are plenty of options out there that you can contact and get a good deal.

Rent with care

Know who you are renting to and make sure to do checks (financial, background, etc.) on potential tenants. You are looking to protect your investment just as they are looking for a landlord who is timely, respectful, and communicative. Do not rent to anyone you are unsure of. Know as much about their financial stability, job situation, and living style as you can gather from former landlords, personal recommendations, and any other method of gaining trust in this person.

Landlord Rent Insurance

It is always good to prepare for unexpected events that may impact your rentals negatively either through natural phenomena such as storms, flooding, or otherwise. You should therefore consider insuring your properties against loss of rental income, medical and legal expenses, etc. Where available and advisable you may encourage your tenants to equally obtain the insurance packages that are appropriate for them.

In Short…

Renting out your property for the first time could be both challenging and exciting. It will also provide you handsome financial rewards especially if you consider the factors listed above. All you need to do is map out your plans and strategies and jump into it with all the commitment and determination to succeed. And in no time, you will find yourself comfortable in your new role as landlord.

To learn more about mortgages and get free online mortgage advice, please visit Independent Mortgage Brokers. A Trustpilot rated ‘excellent’ company

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Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of our Independent Mortgage Brokers to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisers working for or with Independent Mortgage Brokers are fully qualified to provide mortgage advice and authorised and regulated by the Financial Conduct Authority. All our independent Mortgage Brokers will offer advice specific to you and your needs and circumstances. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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