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Becoming
a Landlord for the First Time
- Step by Step Beginner's Guide Part 2
Are
you becoming a landlord wondering how you can successfully manage and
profit from your rental property? If your answer is yes, then welcome
to this Part 2
of our
Beginner's Guide for New Landlords.
Have You Read Step 1 to 3?
If No,
Click
here to go to Part 1
of this Beginner's Guide.
Step 4:
Make Repairs and Maintain the Condition of Your Property
Becoming a landlord means having to deal with any property repairs and
maintenance to make sure that your rental property is in habitable
conditions according to your area's health
and safety codes.
You need to ensure that your property is well
maintained for two reasons - Firstly in many countries there is a
health
and safety standard which the living conditions of your property must
meet. Most majors repairs can very costly and the best way to lower
your expenses is to fix any damages while it is still superficial.
When
you are hiring contractors to carry out repairs on your rental
property, there
are a few things you have to know as a first time landlord. You can ask
your neighbours, friends and the local landlord association to
recommend you contractors who have provided excellent service.
Most
countries issue licenses for contractors but contractors do
not always have to be licensed to carry out repair works.You
should also insist on hiring a licensed contractor because it ensures
that the guy who replacing your water pipes or replacing your roofing
has at least undergone a basic
level of training.
If
you are looking for contractors for the first time, it's a good idea to
ask for price quotes from at least 3 contractors so that you can
compare. The prices quotes also has to contain details of the exact
repair works so that you will know what exactly you are paying for.
Step
5: Keep Records of Your Rental Income and Maintenance Costs
To ensure that you are actually making profits, you will need to get
your hands dirty with some simple accounting.
For
the income side, all you need to add up are the rents from your tenants
and any tax benefits that you get to enjoy as a real estate owner.
The
costs can be a bit more tricky for a first time landlord as there are
many different expenses that you may have to include such as mortgage
payments, home insurance and property taxes. If you have hired any real
estate agents or lawyers, remember to include their fees as well.
Depending
on the terms of your rental agreement, you will also have factor in
maintenance costs such as repairs, garbage collection, gardening,
plumbing if you are the one paying for them.
More
importantly, many landlords forget to include vacancy costs
when calculating their expenses. Vacancy costs are simply the expenses
that you will incur if your property is left vacant.
To
calculate your vacancy cost, first estimate how long your rental
property is
likely to be vacant in a year. This usually varies from 2 weeks to 3
months depending on the demand for rental property in your area. Add
the mortgage payment during this time period to the cost of finding a
new tenant to obtain your vacancy cost.
Step
6: Handle Tenant Problems and Evict Them if Necessary
Whether
you are becoming a landlord for the first time or a highly experienced
property manager,
you will probably come face to face with horrible tenants eventually.
Knowing
how to handle them is vital for preserving your profits and sanity.
Sometimes it's just a simple problem that can be solved with a 5 minute
phone call while other times it can a major issue that involves
obtaining a court order to uproot those nightmare tenants from your
property. Click
here for our complete guide on fixing common tenant problems quick and
easy.
Eviction
of your tenants is a costly and lengthy process so we only recommend it
as a last resort especially if you are a first time landlord. However,
sometimes it's the only way to remove those tenants who are living
terrors. If you need to learn how to evict rotten tenants, Click
here for our tenant eviction guide.
Remember
becoming a landlord can be fun and financially rewarding... if you do
it
right. With our proven strategies, you can be sure of less bumpy
journey as a first time landlord.
Do You Have any Words of Advice or
Encouragement for Our First Time Landlords?
Becoming a landlord for the first time can be both exciting and life changing. Do you have any must-know tips or words of support for our new landlords here? Share your valuable experience with everyone here - We will love to hear your tips, comments and real life stories:
Click here
to return from this Becoming a Landlord page to our First Time Landlord
guide
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