Zack childress once you have become landlord, there are certain things that you need to know and follow. There are certain perks and peril that you need to know before you do anything.
- Fundamental steps
- Make it legal
- Rent collection
- Taxable income
- Common areas
- Law and regulations
- Long term tenants
- Security deposit
- First time landlord
- Screening process
With good amount of saving, choose the right property at the right location and become a landlord.
Make it legal
You cannot rent out a space just like that, you need to get approval from the government and other legal procedures are to be carried out. Insurance has to be applied for all the units in a household. Later you cannot claim if any damage happens.
Know the method to collect your rent. Fix up the deadline date and mode of payment.
You must provide receipts to your tenants and file tax returns, so entire rental income doesn’t come to your pocket. You need to pay appropriate amount of tax at regular intervals.
You need to be aware that yearly once or bi-yearly you need to spend on repair work. Appliance repairs, home maintenance are part of landlord life. Allocate funds for such expenses.
There are some common areas and things in housing, like parking, elevator. These must be taken utmost care and all expenses spent on these things should be shared by both tenants and owners. You can enhance in whatever way you feel to ensure privacy and safety.
Don’t spend much on décor as it is waste of money and ensure all amenities are provided.
Law and regulations
As a landlord you must be aware of all the rules, regulations and laws. There may be amendments from time to time. So the landlord should keep him/herself updated.
The landlord must inform in prior if the tenants have to vacate the place. 2 months prior notice can be given before lease ends. You need to paint the walls and make necessary home improvements before the new tenant enters.
You can build good rapport as well as it is cheap on longer run.
You should keep yourself informed about the first and last month payment amount of the tenant, the tenant should pay the security deposit to the landlord which would be repaid at the time of tenant vacating the place. The security deposit is used for repairs and maintenance purpose; it is used when unexpected damage or repair takes place.
First time landlord
You can take help of the real estate agent/ realtor /property managers in assessing the tenants, though you need to pay them, you can get good tenants.
Before the tenants occupy, selection of tenant takes place by screening process. This is done to get to know about the background information of your tenant. Depending on which you can choose the reasonable tenant.
Beware and not bargain, there are many types of scam going around. Scammers may approach you in form of tenants and betray you. Investigate properly before letting anyone in.
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