Should You Become A Landlord?

Should You Become A Landlord?

Perhaps you are undecided. Perhaps you think that, in 2020, buying for the rental market is a risky prospect.

Whilst there will always be an element of risk associated with being a landlord, there are still many advantages of the buy-to-let market.

The pros

Money

Top of the reasons to become a landlord is obviously money. If you are looking for a stable second income, then this is it. If you have a number of properties for rent, you may even be able to quit the day job and make a good income as a landlord.

Perhaps you won’t get rich quick, but there is a good potential income stream in being a landlord.

The Equity

Hopefully, your rental property is going to appreciate over time. Although it pays to be aware of the fact sometimes a property price can go down over time it is more than likely it will go up.

And depending on the type of property, its condition and, more importantly, the location, it could increase in price very quick.

A lot will also depend on the rental charged and the costs of the mortgage and upkeep of the property. However, your mortgage balance will decrease with every rental check you receive and eventually you can put the money towards building the equity in the property.

The cons

The risk

Without wishing to alarm anyone, becoming a landlord is a risky business.

When you rent a home out to a tenant, you are making yourself liable for many scenarios. These include litigation (i.e. being sued) and sudden loss of income (rent arrears).

Sadly, dealing with evictions is part of the job. If you are even thinking of buying-to-let, then this is something you should be prepared for.

The chances are you will encounter a tenant who gets into arrears. Sometimes this means pursuing them through the legal system, but sometimes you will be forced to write the debt off.

Before becoming a landlord, you should acquaint yourself with the eviction procedures in your area.

There are many reasons why you might find yourself with a gap in your rental income. It may be that your tenants move out sooner than expected, or break their lease agreement. They might withhold rent.

In the worst-case scenario, they might also trash the property and cause you a lot of expense.

It is essential you know about your local state … Read the rest

Real Estate Tips: Tenant Management

Real Estate Tips: Tenant Management

One of the hardest things about property ownership is how best to manage your tenants. And it something that you should not enter into lightly.

In our previous blog, we outlined all the potential pitfalls that might befall you, when it comes to tenants. So how do you navigate your way through this minefield?

Scroll through our checklist to discover the way to hassle free property management.

  • Screening

Always vet potential tenants fully, so you can have peace of mind about their character. Things you should look for are their occupation and salary, how long they have been in their current position, their previous residences, a credit check and of course references.

Sometimes landlords ask for a guarantor in addition to this – it might be worth using this for high risk tenants.

Most of the information you need can be found by using a rental application. This will allow you to discover their employment and rental history, credit, and criminal checks, as well is details about any vehicles and pets, amongst other things.

NB: It is vital you do not discriminate against potential tenants on the grounds of their sex, race, age, religion, or disability. For more information see The Americans with Disability Act and the Fair Housing Act.

The law

When you lease your property, you are in a legal agreement with your tenant. So, what does this mean?

You need to check your local state regulations on rental leases. You should also be aware of your tenants’ rights and of your obligations as a landlord.

Believe us, it is better to be forearmed when it comes to matters of legality!

The Residential Lease Agreement

Your Residential Lease Agreement is the basis of your relationship with your tenants. It makes clear the expectations on both sides of the transaction. In addition to this it:

  • Limits your liability as a landlord
  • Clarifies all regulations, descriptions, and scenarios
  • Helps minimize problems down the line
  • Gives a clear record of the expectations of the tenancy
  • Describes the eviction process
  • Helps to protect your tenant

Lease terms

There are two kinds of lease terms. An automatic renewal or a fixed term.

Automatic renewal

An automatic renewal is a lease term which will keep going every year, or month, unless either side decides to quit.

A fixed term tenancy

This is as it says on the tin, a tenancy agreement where there … Read the rest