The property market is booming, so if you are looking to invest money into a project that will reap the rewards and profit over time, becoming a landlord may well be a brilliant option for you. Millennials are notoriously strapped for cash, so increasing numbers of young adults are opting to rent a property rather than applying for mortgages. You could offer them the home of their dreams in return for monthly rent payments. It’s the perfect symbiotic relationship and great passive income for you. But becoming a landlord entails much more than simply purchasing a property and moving people into it. You have to be able to choose the right tenants for your property and have the weighty responsibility of adhering to certain rules and regulations regarding the maintenance of your property. This can be hard work and you want it to pay off for you. A first step to take is protecting your property. Here are a few precautions to consider before you start to sign any contracts.
Investing in the Right Property
Different areas attract different demographics and you need to ensure that the property you invest in is not only appealing to people who are drawn to the area, but also functional and affordable. Houses near schools and public transport links tend to attract the attention of families, so there’s not much use in purchasing a studio apartment in these kinds of areas. You should instead keep an eye out for homes with multiple bedrooms, bathrooms, large living spaces and a spacious backyard. If you are looking at purchasing a property near a university, you will want a large property with multiple rooms, but at a budget price. As you are likely to find yourself leasing to students, you don’t want to invest in anything too up-market. If you are looking at properties in a city center, close to offices and bars, you’re likely to be catering to a young, professional market. In this case, favor small properties (apartments or studios) with sleek design and as close a proximity to the city center as possible. By investing in the right type of property in the first place, you won’t have to carry out as much work or renovations and will have an easier job finding tenants.
Choose Tenants Wisely
You don’t need to lease your property out to the first people who approach you. Remember, you want reliable tenants with a good previous financial history. Instead of leaving everything in the hands of an estate agent, you may like to meet the tenants yourself, so you can get a feel of their personalities and temperaments. An easy way to do this is to offer to show them around the property yourself. This gives you a chance to ask them a few questions and form a judgment of them without necessitating too formal an arrangement. Never feel awkward asking for references from their previous landlords: positive references can secure you in the knowledge that they are likely to treat your property well and keep to your agreements. You can also run a credit check to see whether they are financially responsible. If your potential tenants are relatively young or have only lived with parents previously, you could also request a guarantor. Most young people’s parents are happy to guarantee that their child will keep to repayments and will sign an agreement to cover outstanding debts otherwise.
Security Deposits
Before anyone moves into a property, insist that they put a security deposit down. This can be stored safely and returned once their contract has expired. This sum will give you reassurance, as it can be used to pay for any damages or repairs that defaulting tenants may leave in their wake, or cover a month’s rent while you find a replacement tenant.
If The Worst Happens
Sometimes, as vigilant and thorough as you are in selecting your tenants, you may find that they subvert your expectations and either damage your property or run late or default on rent payments. In this case, you’re going to have to call in professional help, as tenants are unlikely to up and leave the property at their own will. Collaborate with an experienced eviction attorney who will be able to secure the owed rent payments or evict the individuals from your property as quickly as possible.
By following these simple steps, you will avert problems and potential crisis further down the line. If the worst is to happen, you are also endowed with the knowledge of who to contact to pursue further action. So, it’s time to start searching and to get your foot on the first run of that property-to-rent ladder.