The idea of being a landlord can be an appealing one to a lot of people. Not only does a role like this come with less work than a traditional job, but it also offers flexibility and a chance to dictate how you work.
Of course, though, you still need to work extremely hard to find success with something like this. Property investment is complicated and often filled with pitfalls, but this post will be exploring 6 simple steps that can be taken to make the whole thing much easier for you. Let’s dive right in.
Step 1: Planning & Preparation
The first step in a process like this will always involve some planning a preparation. You need to decide the type of landlord you want to be, the type of property you’re going to be looking for, and how you’re going to manage the whole affair. This can be complicated, but it will all be much easier if you iron this out in the very beginning.
When it comes to choosing the type of landlord you want to be, you have two main choices; residential or business. The first option includes houses, apartments, and other properties that people will live in. The second includes stores, offices, factories, warehouses, and any other type of business property. The type of property you choose will dictate the way that you handle this process down the line.
Alongside choosing the type of property you’ll be managing, it’s also worth thinking about how you will actually manage it. If this is your first property investment, it will be well worth getting some help, even if this means that you have to spend more money in the process. Real estate investing can be complicated, though you can take much of this work away with some simple steps.
Step 2: Finding & Funding A Property
Once you’ve started planning, you can begin your hunt for a property. There are two sides to this; finding the place and funding it. This means that you will need to think about two very different areas that will have a major impact on one another, making this another job that is well worth getting help with.
Finding a property might be harder than you expect, especially during times that are bad for sales. You will need to scour the market to find something that will require as little work as possible but still turn a profit, and the way that you do this will depend on the type of property you’re looking for. It’s always a good idea to look for real estate specialists when you are going through this.
Alongside finding the property, you also need to be able to fund it, and it’s unlikely that you’ll be able to buy the whole place without a mortgage. It always makes sense to organize something like this through a broker, ensuring that you get the best rates even if you have to pay a little extra for the privilege.
Step 3: Preparing The Property
Once you have a place of your own, it will be time to start preparing it for your tenants. Ideally, you will have picked a place with as little work as possible to do on it, ensuring that this part of the process is nice and short. Painting walls, cleaning carpets, and resealing sinks/baths are all nice and easy, but most people will need help from a professional when they are doing anything more complicated.
Alongside making sure that the property looks and feels nice, you also need to think about the law here. Most countries have strict requirements that landlords have to follow, with things like furniture needing to be bolted to walls and boilers being fully-functional. It’s worth having an understanding of this part of the process before you get started with it.
Step 4: Searching For Tenants
With a property that is ready for tenants, it will finally be time to start searching for them. Finding the right tenants for your property can take a lot of work, but it’s always worth going through this to make sure that you get people who will take good care of your place. The place you look for your tenants will depend on the type of landlord you’ve decided to be.
Residential landlords can use regular property sites to post adverts for the spaces, making it incredibly easy to make progress with this. Business landlords will have more work to do, and you may have to find specialist websites to help you out. In both cases, professionals can be used to make the whole thing easier, though this will always cost more.
Step 5: Bringing Tenants On-Board
Your tenants aren’t going to be able to move into your property as soon as they’ve seen it, and there are some important legal issues to cover before you let them in. They need to sign a contract, provide proof of their income/employment, and will need to go through some legal paperwork with you. Many landlords also choose to do inventories with their tenants, ensuring that the place is fully accounted for before you leave them with it.
Step 6: Managing Your Property
Managing the property you’re renting out can be one of the biggest challenges in this process. Not only do you need to make sure that the building is in good condition, but you also need to be careful that your tenants are treating it properly.
Handling repairs and maintenance will be the most costly part of this process. Many people choose to pay people to do this work for them, though you can always save the easy stuff for yourself. Alongside this, it’s also worth thinking about what the tenant has to pay for, as many of the issues you could face with them won’t be your responsibility.
Regular inspections can also be very useful when you are hosting tenants. This will give you a chance to check that they are treating the place well, while also giving you and the tenant an opportunity to talk to one another. If they have had any issues with their place, this will be the perfect time to solve them.
While these six steps will help you to make your way into the position of a successful landlord, there are some additional considerations that are well worth making. This can easily end up saving time, money, and effort down the line.
- Insurance: Having landlord and property insurance can be a huge benefit when you are investing like this. Not only will you be able to get support when financial issues arise, but you will also be more likely to get mortgages with insurance behind you.
- Strictness: It’s always worth being a little bit strict as a landlord. You don’t need to be unreasonable or mean to be people, but it makes sense to establish the rules before you try and be friends with the people you’re working with.
- Rights: Both tenants and landlords have special rights that apply to them in an agreement like this. These rights are crucial for both parties, and it makes sense to learn about them before you do much with your investment.
With all of this in mind, you should be feeling ready to start down the path to becoming a successful landlord. A lot of people struggle with work like this, but it will only get easier down the line as you improve your knowledge and skills. Being a landlord can be exciting, but it can also come with a lot of challenges along the way.