Whether you want to casually rent out one property or whether you want to rent out a number of different properties at one time in order to grow your portfolio, to become a landlord, you’re going to have to take a number of steps. From deciding where to purchase your property to finding trustworthy tenants, you’re going to need to take them all to ensure that your venture is professional and as profitable as it can be.
Here are three steps you need to take to become a landlord:
- Carefully decide where to purchase
If you want your life as a landlord to be a money-spinning venture, you have to be careful when it comes to deciding where you purchase your property. In this instance, you should:
- Take into account not only the likelihood of drawing tenants now but also in the future — the best way to do this is to study the developments of a particular area and relate them to how they are set to impact the number of people wanting to live there.
- Understand that certain areas draw certain types of tenants at certain times of the year, and your ability to make money as a landlord will be driven by these trends — university towns draw in students at the start of the academic year in September, for instance.
- Understand landlord laws and get insured
Brushing up on general landlord law and getting yourself insured might not be particularly exciting tasks, but they are necessary. If you don’t perform them, you’ll either find yourself breaking the law or unable to protect yourself from it should anything go wrong, whether it’s your fault or not.
Some of the laws that you should be aware of include:
- Lease lengths (different governments and councils will impose different limits)
- Maximum deposit amounts
- The process of eviction (again, varies on location)
- Tenant’s rights, particularly when it comes to repairs
In order to protect yourself from a number of problems relating to your rented property, including theft befalling it, you should take out landlord insurance. By covering yourself in this way, you will be able to be sure that, no matter how frequently you visit your property in person, it will always remain protected in a financial sense.
- Find trustworthy tenants
If you don’t resolve to screen and vet potential tenants thoroughly in order to unearth trustworthy ones, you can’t moan when an untrustworthy one does, in fact, cause you problems going forward. When it comes to screening tenants, you should:
- Perform a criminal background check
- Perform a credit check
- Look through their previous eviction records
- Seek prior landlord references
- Check their employment verification
Being a landlord could prove to be a very lucrative bit of business for you, whether you take the roll on full-time or treat it as a side hustle. It’s only going to wield you great profit, however, if you resolve to take the three important steps laid out above. If you don’t, you’ll no doubt find the whole venture to be far more trouble than it’s worth.