If you have just purchased a new rental property and are now a first time landlord, you may have a lot of questions and doubts in your mind about how to go about it. What to do first, what not to do, what has to be done and so forth. These feelings of apprehension will be there and they are normal for every new landlord and here are a few things that can help you through them.
Five things you should know as a new landlord
- The proceeds are not instantaneous
The money will not start pouring in as the mortgage on the property has to be paid first, meaning the house will fetch income and start filling your coffers only after the mortgage has been paid up and that may take anywhere between ten and 30 years.
- A lot of paper work is involved
You will need to draw out contracts, pay taxes, hire a lawyer, get repairs done, and also have some left for savings, then there’s maintenance costs- the list goes on! So make sure your rent is good enough to cover for all these while at the same time falls within the market rates.
- Have your tenants fill in forms
The contracts that a new landlord such as yourself should use are the simplest ones as they are the most effective. The payment plans, the deposit amounts and the penalty for late payments can all be mentioned in clean unambiguous forms.
- Choose carefully
As much as you can, avoid relatives and close friends as they are likely to ask for lower rent and may demand favors.
There are professional property management firms that can do all of the above for a new landlord and the cost is usually worth it.
These are just a few of the things that you should keep in mind when you start off as a new landlord and you will definitely get better with experience.