Investment

Earn a Living By Collecting Rent: 5 Steps to Becoming a Landlord

Did you know that the average American spends almost 2,000 hours every year at work?

Spending the best hours of your life punching someone else’s time clock can get old. The good news, though, is that it doesn’t have to be that way.

If you’ve been looking for a way to make a living without being tied down to a regular 9-5, it’s time to consider becoming a landlord. We’ve got the details to help you make this dream a reality.

Table of Contents

Finding the Right Rental

Before you can make money by renting property, the first step is having a property to rent.

Rent Space in Your Home

Some landlords start off by renting space in their primary residence. This could be an excellent option if you have a space with a separate entrance, like an in-law suite or a casita. That said, renting out a spare room could also be an option.

Rent a Separate Property

If you prefer more distance from your potential tenants, you will need to purchase a rental property. Before you purchase a potential rental, you will want to make sure that it has the potential to produce income.

For instance, the average asking price for a rental home or apartment in the United States is around $900 a month. To make money by renting, you would need to purchase a property that had a monthly payment lower than what you could likely rent it for. Don’t forget to factor in the cost of taxes and insurance when you make calculations!

Find the Right Tenants

Once you have a place to rent, the next step is finding people to rent it. The key is to find reliable tenants who you can count on to make their monthly payments and take good care of your property.

To learn more about your potential tenants, always perform background and credit checks. This will confirm that they have a record of paying their bills on time and that they don’t have a criminal record.

Once you’ve selected a tenant, make sure to draw up rental agreements in writing. A good rental agreement will clearly outline the terms that both parties are agreeing to, and each of your responsibilities. This agreement will offer legal protection in the event of damage to your property or unpaid bills.