Buying Rental Property and Becoming a Landlord Do you dream of owning property? Perhaps multiple investment properties from which to earn a monthly stream of income? But before you contact your real estate agent, consider what’s really involved. If you want to create an income immediately, you’ll need to rent your property.
Start Up Capital All potential landlords consider the cost of purchasing an investment property, but many overlook the costs to remodel. In other words, don’t expect start-up costs to end at the closing.
Making Repairs When it comes to being a landlord, two things in life are inevitable: death and repairs. Don’t even consider a property management business unless you’re sure that you can pay for repairs. Landlord and tenant laws require that you make serious repairs quickly.
Collecting Rent You’ll have great tenants who pay the rent on time every month. You’ll have good tenants who slip up from time to time but always let you know ahead of time when to expect the rent. And then you’ll have the tenants that don’t pay and don’t call. As a landlord, you’re going to have to play bill collector from time to time.
Dealing with Problem Tenants Most of your tenants will pay the rent, treat the property like their own, and keep the neighbors happy. But at some point, you’ll inevitably have a problem tenant.
Paying Taxes One thing you can’t overlook is taxes. Renting property is your business and so you’ll have to report the income you earn when you file your taxes every year. But one tax commonly overlooked is property tax. If you own the home you live in plus one rental house, your property tax bill could be double what you were paying before you purchased the rental.
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