Becoming a landlord sounds like a promising and lucrative venture. But before you buy a property or turn one into a rental unit, find out everything that’s involved. You might be surprised to find out that becoming a landlord is about a lot more than just gathering the rent checks and fixing a few things now and then.
Know What’s Involved
Do you really know what’s involved in becoming a landlord? You might be surprised by what you don’t know…and need to know. Check out this eye-opening article in Money listing 6 rookie mistakes to avoid when becoming a rental property owner. For starters, expect expenses to be higher with a rental unit compared to a residence. Depending on where you buy the property, you also could end up paying special taxes, higher insurance rates and dealing with inspections that could turn into major costs if not done properly.
Review Local Law
Before you start renting the property, review your state, city, county and municipal rights as a landlord. And don’t stop there! Knowing a tenant’s rights can save you lots of trouble down the road. Check out the resources we provide for tenants and landlords in Washington state in our recent blog post.
Always Screen Applicants
Before you sign a rental agreement with the tenant, engage in some due diligence. In other words, screen all applicants to determine their ability to pay the rent on time. Money Crashers suggests running a background check and contacting previous landlords to determine an applicant’s suitability. Click here to read Money Crashers’ full list of questions to ask and what to check for.
Be Ready for Eviction
No one wants to think about eviction, but it happens. Preparing and serving an eviction notice protects your rights as a landlord. We offer an eviction kit, complete with all of the forms you need to file and serve the eviction notice, at DoItYourselfLegalKits.com. Click here for more information about eviction kit – the kits are available as an instant download, or you can order a print version we’ll mail to you.
Prepare a Lease
Creating a simple lease agreement sounds easy. But an informative article at CBS News recommends hiring an attorney who specializes in real estate. That way, your rental agreement is in compliance with local and state laws and can’t be used against you when the tenant decides to leave. Click here to see our referral list of real estate attorneys.