Your Finish Rich Plan - A Personal Finance Blog

Archive for April 9th, 2008

Today, the financial website TheStreet.com published a short article titled Read This Before Becoming A Landlord. They offer the following facts and tips for the wannabe landlord:

• Your expenses: mortgage, property taxes, insurance, homeowner’s association fees (if any) and maintenance, should be at least 5% below the going rate for a comparable rental property in your neighborhood.
• The average landlord earns about $2,000 profit per unit each year, before tax.
• When looking for tenants, try the inexpensive, easy search methods first like Craigslist, as well as targeted word-of-mouth marketing (local schools, precincts, temples and churches)
• Request IDs and ask for references of previous landlords from prospective tenants and check them.
• Familiarize yourself with landlord/tenant laws, and make sure your lease forms are correct for your state. Be careful of tenants who bring their own agreement for you to sign in lieu of a standard landlord/tenant lease
• Keep the property well maintained. It’s the best way to ensure a good relationship with your renters
• Make sure your insurer knows that a tenant will be occupying the home. Change your coverage so you’re protected from injuries tenants may receive on the property as well as legal disputes from serving as a landlord.
• Hiring the services of a property manager to take care of the dirty work for you is an option, but make sure the manager is a good one. If he or she is involved in a crime on your property or if they steal from the tenants, your renters could take you to court
• Think twice before renting to people you know. Countless friendships have been lost because of missed rent payments or misunderstandings over repairs or lease agreements Continue reading this article...

  Technorati Tags: investing, landlord, leverage, passive income, real estate, tax

  Posted in Extra Income, Real Estate | 9 Comments » | Read more..