Looking to be a landlord, and take advantage of the current dip in real estate prices? While by no means a passive investment, if you’re up to the challenge, residential rental property ownership can provide not just additional short- and long-term income, but tax benefits as well.
Or are you forced to be a Landlord? (Job Transfer, need to reduce expenses, etc.)
Looking to be a landlord, and take advantage of the current dip in real estate prices? While by no means a passive investment, if you’re up to the challenge, residential rental property ownership can provide not just additional short- and long-term income, but tax benefits as well.
Or are you forced to be a Landlord? (Job Transfer, need to reduce expenses, etc.)
Buying right is the trick, but if you bought in the wrong market, and need to make the most out of the investment. Follow these tips.
My own experience with 5 rental properties, and being a full time property manager has taught me a few things worth sharing.
This can be one of the most important tips on this post. Things happen, and a tenant may not pay rent this month, or you may need to replace the water heater. Having enough money set aside will make sure you are in control of you investment. Form my experience I have learned that when a tenant doesn’t pay rent, it usually due to a change in their life, Divorce, loss of job, health issues ,etc.
My simple advise is if you wouldn’t live there, then don’t buy it. If it’s too good of a deal to pass up, then remember that it maybe harder to rent. People want to feel safe, and want to feel safe at home.
Make sure you understand local Tenant/Landlord law. You can get some decent info online. Make sure you contact a Lawyer.
This is important in places like Washington DC. You may buy a really nice unit downtown, and come to find out you can’t get a parking permit. Now when you try and rent the units, you just lost 1/2 of your potential tenants.
Old victorians may sounds nice, but have a lot of potential problems, and regular up keep.
I would personally never purchase an investment property without consulting a licensed home inspector, as too many potential dangers lurk within and behind the walls which can turn your House into The Money Pit.
Radon, lead paint, asbestos and mold are four primary concerns, as they pose significant health risks and can be expensive problems, requiring specialists to remediate.
As a landlord, there are certain things you need to pay special attention to in order to prevent potential lawsuits. These include:
- Exterior stairways without handrails or where ice/snow/rain may cause a slip hazard
- Steep steps
- CO and smoke detectors (fire hazard)
- Obstructed doorways or exits (fire hazard)
- Broken windows/glass
- Cracks or unevenness in sidewalks, driveways, or walkways (trip hazard)
- Open electrical circuits, outlets or wires (electrocution hazard)
- Unfenced swimming pools (drowning hazard)
- Lack of GFI outlets near kitchen/bathroom water facilities (electrocution hazard)
As a rental property owner, you have an increased risk of lawsuits overall, so safety is a primary concern, but accidents still happen. Owners often choose to limit their personal liability risk by establishing each property as its own LLC. It is advisable to consult a lawyer to ensure that your other assets will be protected in the event of a lawsuit.
Invest where you know. My rule of thumb, the rentals needs to be less then 45 minutes away. You might hear about great deals in other states, but buyer beware. If you chose to invest outside of your area, your best friend will be a local property manager. They can help you invest in the right locations.
The bigger the rental, the more I can get in rent, so I will make more money. Although this might be true in some cases, the best advise is to start small, with something you can mange, and work you way up to the larger units. Depending on your location, you may only want to invest in 3 bed, 2 baths. In the DC market, a 1 bed 1 bath with move fast, but in Columbia Maryland, a 1 bed 1 bath will sit longer than a 2 bed 1 bath. Know your market, or contact a local Property manager, they will be able to give you some good advise.
This is simple. In single families, this usually is not a problem. Tenant pays all utilities. In multi units, you want to make sure each unit has its own meter. If they are on the same meter, it creates problem,s and the landlord usually pays these utilities, and this will effect you bottom line.
This could possibly be the most important tip on this list. A professional manager knows the local laws, has the contacts to get thing done quickly, and right. From Evictions, to maintenance. A typical property manager will charge you a monthly fee to manage your rental. If you live outside your market, don’t have the time, or want a middle man to do all the work, a Property Manager is what you are looking for.
The right property manager will ensure you have the following:
Full back ground check
Proper lease
Proper Management during the lease.
Real Property Management Metro
www.RealPropertyManagementDC.com
Office : 202-269-0303
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