By Alfred Ardis
Given the current economic climate, one income may not be enough for you to live comfortably. If you’re looking for a second income and have some extra money on hand, rental houses can be a great option. Renting out apartments or small homes can be incredibly lucrative, especially if you’re able to find a property that is in reasonably good condition and does not require many repairs before it is ready to be rented out. In addition to earning money from rent payments each month, this type of business also comes with tax benefits. If you want to start a second career as a landlord, there are a few things you should do before you begin soliciting prospective tenants.
First, you should make sure the rental houses you own are up to code. It is not enough to simply purchase a property, put a “for rent” ad in the newspaper, and start waiting for prospective tenants to call. You need to make sure the property is safe and secure, or else you could expose yourself to potential liability. If you have no experience with home inspections, you should hire an experienced contractor who can inspect the home and make any necessary repairs to ensure that the property is safe for people to live in.
In addition to consulting with a contractor, it is also wise to seek the advice of an attorney. He or she can advise you about the landlord-tenant laws in your state. This will help you understand your legal rights if a tenant fails to pay his or her rent on time or damages the property. It will also allow you to keep track of the legal obligations that you, as a landlord, have towards your tenants. This generally includes an obligation to maintain your rental houses in good shape, make any repairs not caused by the tenant’s own negligence, and protect the tenant from nuisances. The attorney you choose to hire can also assist you with writing a lease. Many states have specific laws about what you can and can’t put in a lease, and with the help of a lawyer, you may be able to absolve yourself of liability if the tenant or a third party is injured while on the property.
Another thing to consider is whether or not you will be a “hands-on” landlord or whether you should work with a property management firm. If you have a decent amount of free time and are good at being proactive and calling repair companies, you may not need a property management firm to be a successful landlord. However, if you are busy or own quite a few rental houses, a property management firm can help you. A key part of being a great landlord is solving problems quickly and making sure everything runs smoothly, and property management firms are excellent at this, meaning they can be very helpful to you.
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