Becoming a landlord can be one of the most financially rewarding experiences you can make, creating a steady revenue stream and solid financial portfolio for you and your family for years to come. The trouble is, while owning a rental property is a lucrative investment, it is not for everyone. To be a successful landlord, you will need substantial capital, time, and attention – though hiring a property management firm can make being a landlord far easier. Here are three things you should consider before moving forward:
1.) Understand the long-term financial commitment involved.
The financial implications of becoming a landlord go beyond just finding the right rental home. You are responsible for all repairs and maintenance projects after that, and when you rent to numerous tenants, the number of those repairs can add up. Plus, if your tenants fail to pay rent, or you fail to find tenants for a while, you will be responsible for paying the mortgage (if applicable), taxes, homeowners insurance, and utilities – which, in some rare cases, could be for a substantial amount of time. Therefore, as you consider becoming a landlord, consider the financial implications for you, besides just buying the home.
2.) Learn all you can about your target area.
That being said, it is still important to get a good deal on the home that you buy, which can be a challenge when the real estate market is hot (as it is in Waco, TX right now). Working with an experienced realtor can help you find a rental home that will work within your budget, as well as help you determine what is a fair rental amount (based on the home’s features, condition, and location) for you to charge each month. Remember, if you charge too low, your rental home will cause you to go into the negative. Too high, and you won’t find a tenant for quite some time. Typically, the rent is based on a percentage of the home’s market value.
3.) Have a deep understanding of the law: there are many different landlord requirements.
When you become a landlord, you have many legal obligations. For example, you must maintain your property, provide access to running water, and follow all health and building codes. There are also specific requirements for communicating with your tenant, collecting rent, pursuing eviction, raising rent, and more. Without the proper knowledge, you will be held liable. This is one of the main reasons landlords choose to hire a Property Management Company, who can handle all of the intricacies of lease management with precision.
At Real Property Management Talent, we help new and seasoned landlords make the most of their investments. With over 30 years of expertise, we have the tools, resources, and experience needed to ensure your rental property grows in value for years to come. We are locally owned and operated, serving Waco and Central, TX. To learn more about the services we offer, call us today: 254-651-0576. We look forward to hearing from you!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
