My husband and I have always bounced around the idea of having rental properties. It can be an easy way to make income if you have the right renters, but it can also be a huge headache if you get irresponsible tenants. My parents used to have a rental property and through work I represent landlords. I have learned that there are certain factors you must consider before making the decision:
1) Can you afford to finance your rental property. Buy to let mortgages are mortgage arrangements in which an investor borrows money to purchase property in the private rental sector. You must consider not only the amount of rent you will be able to charge tenants, but also what your mortgage payment will be.
2) Learn the tax rules. In addition to the deductions for mortgage interest and taxes, landlords are eligible for additional tax advantages.
3) Finding reliable tenants. You want to find the perfect tenants, but make sure you understand the Fair Housing Laws regarding what you can ask, and on what basis you can reject applicants.
4) Maintaining your property. Are you a Handy Manny and able to do repairs yourself or are you going to have to hire a handy many to fix any problems that come up.
As a landlord you could have a lot to look forward to — many rewards, but also lots of responsibilities. You’ll need to make sure your tenants’ living quarters meet health and safety codes. You’ll be responsible for abiding by federal, state, and local landlord/tenant laws. It will be your responsibility to fi nd tenants, collect rent, and manage your property within a budget. You’ll need to keep careful records documenting both the income you collect and the expenses you pay. And all the while, you’ll be responsible for making timely mortgage payments — whether or not your rental units are occupied, and whether or not your tenants pay their rent on time.
We are not sure we are quite ready to take this on yet. Are you?