If you're about to enter real estate investing and you've read materials about it, I'm sure you've heard about renting out your property as the best option to continuously receive monthly residual income. But what about other concerns when you rent out your property? Get to know them by taking some time to read this article. If you have no previous experience, you need to know the cost involved in renting out a property.
You have mortgage payment, property tax, insurance, and maintenance. In order for you to take home a positive return from the rent, you rent price needs to cover all these cost plus your markup for profit. If you have a lawn, add the cost to maintain this lawn to your maintenance cost also because your tenant will not pay for this.
If you're a newcomer to this kind of business, perhaps you want to ask how you can determine the correct rent price. This task is left to your own discretion. However, consider the following when you're trying to determine how much will you rent out your property. The number one consideration is the demand for rental properties. If there's a high rental property demand in the area, you can demand a higher price for your property too.
This is true when your property is near business establishment or near downtown. Base your price on the overall soundness of your property too. Renters are willing to pay higher price in exchange for safety.
Before you rent out your property, be sure that it has been recently inspected by health and safety inspectors. They give out certificate or signed document as a proof that your property pass health and safety standards and you can show this to your tenant to demand higher price. You also need this certificate as evidence that your property is habitable in case your tenants comes up with a silly law suit claiming that they've developed crazy diseases while living in your house. It also pays to know your rights and obligations as a landlord and the rights and obligations of your tenants too. Tenants nowadays are more aware about their rights and they know that they can sue you if they found a tint of hazard in your property. Protect yourself from these silly law suits but educating yourself about your own rights too while meeting your obligations as a landlord.
When you rent out your property, you're opening it up to tenants that don't know how to care of a house. They know that you're obligated to shoulder the repairs so that they don't care about trashing your property. That is why it is important for you to screen your tenants and accept only those you can trust to take care of your property. At the end of the day, if you plan to rent out your property, you must be prepared to become a landlord. You must know that being a landlord means to be on call 24/7 to take care of your tenant's house-related problems.
Of course you can hire a property-management to take care of all these for you, but be prepared to pay them at least 10% of the monthly rent price of your property.
Author Jack Cockrel is a real estate investor based in Atlanta, Georgia. He has made more than 750 real estate transactions since 1996. For Real Estate Investing Tips get his free course Real Estate Investing Free Course.