Steps To Take When Considering Becoming A Landlord
Becoming a landlord is a long, complex and involved process
. There is a lot of information to take in unless you want to make a large investment without knowing what you are doing. In order to prepare yourself to become a landlord, here are some of the most important things you should be thinking about already.
Maintenance And Redecoration Costs
When working out how much you can afford to spend on a house, maintenance and redecoration is one of the biggest unknowns that you have to deal with. It is you who will usually have to deal with it, as well. It is your property, and you have the biggest investment in it, not your client.
Problems can come up when you find out that your property is not decorated to the level required for the price you are asking, or that certain pieces of equipment require expert maintenance from time to time. These will only usually be surprises if you are investing in a new property, rather than renting out a room in an old property, but you do need to prepare for them.
To be on the safe side, make sure you have the cash available to cover any issue that could come up. If you find it difficult to come up with the funds to decorate your property to a basic standard, you could miss out on tenants. If your property does not have tenants, you are not generating the funds that you need to decorate your property. The whole situation can become quite financially difficult quite quickly.
Be Sure You Can Cope With The Tenants
The stress of dealing with bad or incompetent tenants can be enormous.
Consider whether you are prepared for multiple situations. You might, for instance, be quite prepared to reject a deliberately difficult or troublesome tenant, but reluctant or unable to deal firmly with a tenant who means well but has repeated trouble getting funds to you on time.
You will also have to play the bad guy if there are consistent problems with neighbours or authority figures. Noise pollution and parties that go on past a reasonable amount of time should not be issues that anyone is forced to deal with, but you will frequently have to take a hard line on behalf of someone else. This is not something that everyone is willing, or able, to deal with.
Honestly assess your capabilities.
Decide whether you could deal with a worst case scenario tenant from hell, a well meaning but irritating tenant, and inconsiderate tenants who cause problems for others. If you think that describes you, you should be fine.
Learn The Basics Of How The Law Applies To You
Find out what landlord protection you are entitled to, and what you are and are not allowed to do by law.
You will find tenants who insist blind that late fees are illegal, and you need to have a grasp of why you are in the right in order to convince them to pay, for instance. Not being able to explain why you are entitled to late fees, you could stand to lose either money, or an otherwise conscientious tenant.
Make sure you have control over the legal language in the lease agreement. If tenants are allowed to provide their own lease agreement, it will be biased towards them, and could end up costing you a good deal of money. Your tenant might not seem like a legal mastermind, but attorneys will work for anyone. This cuts both ways, as of course, you do not have to write the lease agreement yourself, but understanding how it protects you, and what is a standard clause and what is unusual, will be helpful.
Consider Your Options In Respect To Landlord Insurance
Cheap landlord insurance can give you a firm base to run a successful enterprise from, but may not provide certain kinds of cover.
Look into insurance packages that provide landlord contents insurance and landlord rent protection insurance, and you should find out what level of insurance you think you will need.
Once you have worked out what sort of package you want, shop around online to find the best deal on landlord insurance.
by: Sarah Shore
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