Have you ever thought about becoming a landlord and making passive income every month by collecting money from your tenants? It’s a popular way to earn long term wealth without doing much work. One of the reasons that many people aren’t able to become a landlord is because they don’t know where to start. Finding out where to start and how to proceed to become a landlord can be tricky with all of the information that’s available on the internet. According to Anderson Advisors, there’s a lot more that goes into real estate than just collecting checks every month. Read on to find out more about how to become a landlord.
Owning a Property
One of the first, and most obvious steps to achieve before becoming a landlord is owning a property. If you don’t own property, then you at least need to be in the process of paying a mortgage for a property. Depending on the kind of property you own, it will result in the amount of money you can charge a tenant.
Finding a property to start off with can be difficult. One way to gradually become a landlord is by doing a process called house hacking. House hacking is when you live in one of the multiple units of your investment property as your primary residence, and have renters from the other units pay your mortgage and expenses. So basically, you would be getting paid to live in the same property as your tenant, but in a different unit. You wouldn’t have to worry about paying for utilities or a mortgage because you can use your tenants’ monthly rent checks to cover it and still pocket some of that money.
House hacking is a great way to become a landlord without completely diving into it headfirst. This method is for those who aren’t huge risk-takers but still want to become landlords. But what’s next after this?
So now that you have your first property, it’s time to find some tenants. Once again, this can be a very step in the process for many people. Unless you know a friend or family member who wants to move in immediately, you’ll need to advertise that you have a property available to be leased. This can be done through a number of online real estate websites like Zillow or Google. An important part of this step is to make sure you really market your property and attract many different tenants to choose from. A great way to do this is by taking high-quality pictures and describing the best features of living at the property.
After you have a few interested people who want to look at your property, it’s important to meet with them for a tour. This will give you a chance to show them around the property and also get to know them. It’s suggested that you screen every tenant by doing a background check to make sure you get the best people to live at your properties. You don’t want anyone living at your property who could possibly damage it.
It’s also important to know your tenant’s rights while living at your property. Learning things like Money Informer’s list of five different ways tenants can sue a landlord will be helpful in the long run.
Make a Lease
Once you’ve found the right tenant, it’s time to make a lease and get them to sign it. A lease is a binding contract that locks you and your tenant into an agreement to let them live at your property. It’s important that your lease is legally valid and written correctly. If it’s your first time, it might be best to see a lawyer and have them help you create your lease. According to Legal Zoom, first-time landlords can quickly find help creating a lease within ten minutes. There is also a lot of other information available online about how to write your own lease.
After the lease is signed, the only thing left to do is give the keys to your tenant and watch the money start rolling in every month. Unless something at the property breaks or is damaged, you will be getting paid to do nothing.