Some people plan on going into property rental and making a living through this but in some cases, it can come a little out of the blue. For instance, you might inherit a property, or move in with your partner and don’t want to sell your existing property.
Becoming a landlord has a lot of responsibilities, and isn’t something you should jump into lightly.
Check the tax implications
Even if the rent is only covering your expenses you still have to declare your status and income to the relevant authorities. It’s a good idea to check with a tax adviser first, especially if you think your additional income will put you close to or over a tax threshold.
Research the rental market in the area
Renting out apartments and houses isn’t as easy as putting a sign up. You need to research your local market. This will help you to price your rental fairly and update it to a standard that is expected of the area.
Have your property updated
Rental properties are subject to a lot of different regulations in relation to safety. Before you can legally rent out your property, you must make sure that you comply with these regulations, or you could find that your insurance is invalid, or on the wrong end of a lawsuit should something go wrong.
Each state will have its own particular laws regarding this, so make sure that you research these thoroughly and have your property updated to comply.
As well as making your apartment legally compliant, you may also want to update the decor or make any repairs, it will make it a much more attractive rental option and you’ll be able to assess the condition of it more accurately when the tenants move out.
Get the right insurance
Landlord’s insurance can protect you by covering payments if tenants don’t pay their rent or damage the property. It also provides legal cover in the event of a claim against you.
In addition to this insurance, there are other policies that you might want to consider. These include cover for essential items within the property such as the plumbing and heating systems or major kitchen appliances.
Use a property management company
There’s a lot to consider when you become a landlord, it can feel a little overwhelming. If you don’t have the time or inclination to do it yourself, then you can use a property management company or a self-employed manager to run everything for you. For a percentage of the monthly rental fee, they can take care of everything from background checks on potential renters to arranging repairs. They’re professionals, so you don’t have to worry about the details. If there’s a bigger issue, they will bring it to your attention.
Renting out a property can be a complicated process if you’ve never done it before, but with the right preparation, it can be a rewarding experience that can bring great financial benefits over the long term.
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