How to Become a Landlord
Investing in real estate is an excellent way to create wealth by using Other People's Money. You will be using the bank's money to purchase a property and your tenant's money to repay the bank.
If you can afford to subsidize any shortfall there may be between rental income and mortgage repayment, you are in business to become a landlord. You must also make allowance for vacancy periods, levies, rates and taxes. Your local chamber of commerce, real estate agent or homeowners association can give you information to help you do your calculations.
Your rental agreements must make provision for annual escalation in rent, which in time will cancel out the shortfall in repayments. You will then be ready to add another property to your portfolio. Furthermore, the rental income from your first property counts towards your personal income, which helps you qualify for a mortgage on a second property - and so on.
Do your homework thoroughly. Invest in the type of properties where the rental demand is high and in an area where there is good growth in real estate prices. Get advice on estate planning before you decide on whether to buy the property in your personal capacity, a partnership, living trust etc.
When you become a landlord, the most important part is finding good tenants. Thorough tenant screening is crucial and well worth paying for. You can rather have an empty apartment for a month, than filling it in a hurry with a bad tenant. A one-month vacancy will cost you a lot less in the long run.
As a landlord, you must familiarize yourself with the renter's rights in your specific area. More than the legal rights though, a landlord should consider good tenants as a valuable asset and must look after them as any business must look after their customers.
Related Tags: real estate investing, tenants, estate planning, renters, rental agreements, become a landlord
You may decide to pay a property management company to look after your rental properties. However, it is not difficult to compile your own property rental agreement to suit your specific requirements, or to manage your tenants yourself when you become a landlord.
A Sawyer is with http://www.free-legal-document.com/, a site supplying free legal agreements as well as extensive information on what to look for before signing any contract.
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