So you have an extra room and want to make a little side cash? Do you have an investment or vacation property sitting vacant? While maybe you should rent it out! Though the idea of getting “easy” money form a rental property sounds terrific, there are some things to think about before becoming a landlord.
Check the Laws
Not everywhere can legally be a rented. There are loads of zoning laws that may not allow for subletting. Also, if you have a home owner’s association or live in a condo, you need to check with the board. Don’t forget you will need to notify your insurance agent and this could be extra money as well. Finally, there may be renovations required, for fire, safety, or handicap accessibility. This could involve additional smoke detectors or adding devices to help tenants up stairs, visit ageukmobility.co.uk for more information on the latter. If you can’t do it legally, there is no point in doing it. So make sure all your legal ducks are in a row before moving any further.
Finding a Tenant
Just because you have a space, doesn’t mean tenants will magically appear. Depending on your city’s housing market finding tenants can be difficult and each unrented month is money out of your pocket. So do your homework on the neighborhood, prices, and what kind of people want to move there and market accordingly. If your neighborhood is near a college, use this as a selling point, furnish it with college appropriate furniture and tout how many bedrooms it has. If your neighborhood is hip for young couples, explain how it is quiet location, with room for a nursery. Like most things, it is all about knowing the market and playing to your skills. If this seems overwhelming you may look into a rental agent, who can solve a bulk of these problems for a fee.
Once You Get a Tenant, It Is Still Work
So your renovated garage was just rented quickly and the tenants have been paying their rent on time? Sounds like you have made it right? Not so fast…. Even if everything goes as planned being a landlord is still lots of time and money. If a total breaks at 3am, you are on the hook. There are lots of landlord/tenant laws and you are required to maintain a livable location for your tenants. So will be obliged to take care of any repairs yourself or hire a contractor. This means it is best you know how to do some of this yourself to limit the amount of expensive calls to contractors you have to make.
These are all things to think about before becoming a landlord but don’t let them discourage you too much. Renting properties can still be a lucrative business but it is best to think of it as more a part-time job than a cash cow.