Thoughts to Consider When Becoming a Landlord

There are some things to consider if you are thinking of jumping into the market of being a landlord. Being a landlord can provide you with extra income but does not come without hassles. If you have a property that you are considering leasing out to tenants there are some aspects to consider:

Listing with an agent or advertising yourself

There are many advantages to using an agent. An agent is someone you will hire and who agrees to a certain amount to advertise and maintain your property. For those who do not live locally, this may be a desirable option. A real estate agent will:

- Advertise and show the property to potential renters
- Prepare any necessary documents/lease agreements
- Ensure that the terms of the agreements are being met
- Collect rental payments
- Arrange for repairs
- Deal with issues, such as noise problems
- Conduct inspections
- Clean and inspect the unit after lease expires

You will need insurance on the property

You will need to take out an insurance policy on the unit in the event that a renter causes serious damage. Insurance companies can offer policies that cater to landlords. These policies can protect you from things such as:

- Lack of payment from the renter
- Damage inflicted by the renter to the structure of the home
- Theft
- Damage to any appliances or fixtures provided by the landlord

The tenant typically will provide insurance for the contents of the unit, which will cover personal belongings or anything with which they entered onto the premises.

Things to consider when deciding on tenants

Landlords can develop a form for potential renters that will provide necessary information. Landlords can ask for the following information:

- Identification
- Income
- References
- Previous housing accommodations
- What is the anticipated length of stay in your unit
- Possibly occupants
- Contact information

It is strongly suggested that, as a landlord, that you contact any references given and discuss your possible tenant to determine if they would be suitable tenants. You can ask questions along the lines of:

- How long have you know this person/family
- Have they been timely in previous rental payments
- Are they capable of keeping your unit in acceptable condition
- Do you believe they would be able to continue to make timely rental payments
- Are there any other details you should be made aware of?

A landlord needs to be careful not to discriminate. You cannot exclude possible renters based on:

- Age
- Marital status
- Children
- Gender
- Disabilities
- Pregnancy
- Race
- Sexuality

A landlord must also realize that you must keep up your property whether you have a tenant or not. Payments on the property will have to continue to be made and if you go for a length of time with no tenant you would be a double mortgage payment – one for the home you live in and one for the rental property.

There are also costs associated with travel expenses, if you do not use a real estate agent, to and from the unit to do inspections, collect payment or make repairs to the property. Repairs can be expensive, especially when carpets or appliances need replacing. The unit will most likely need to be repainted after a tenant departs.

Owning a rental unit can be lucrative, especially if you are able to maintain more than one property but you also need to consider if the hassle involved in caring for these properties is a challenge you are willing to take.

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