Over 44 million people in the United States rent their homes. That means that behind everyone's home that is rented, there is someone doing the property management.
That doesn't even include Airbnb, Vrbo, or any other vacation rental site.
However, if you are thinking about renting out your home or apartment when you are gone traveling or as a second home, then you need to know the answer to this question: "How do you become a landlord?" Because, in reality, if you rent your home to anyone, you are a landlord.
Read on to learn about the basics of becoming a landlord.
Buy an Investment Property
Your first step is to buy an investment property. This could be something that needs some fixing up that you can DIY, or this could be a property that is ready to go.
Whatever you do, make sure your investment property is close to your home or somewhere you can easily get to, in a safe neighborhood, and is a popular place for visitors.
Create a Budget
When creating a budget, be sure that you take into account that you will come across unexpected costs.
Here are a few costs that you will need to keep in mind:
- Landlord insurance
- Maintenance and repair costs
- Rental licensing and other mandatory fees
- Property and rental income tax
You will also need to take into consideration what you will need to pay out of pocket if your rental property sits vacant.
As a landlord, you want to make sure you have landlord's insurance to cover you if something goes wrong.
It's still important to convince your tenants to purchase their own renter's insurance since your landlord's insurance will not cover their belongings.
Determine the Rent to Charge
If you're renting out a property, the most important decision to make is how much you want to charge renters.
To start, look into what other properties are charging.
It is also important to note that rental prices will change based on the length of time you are renting out. If you plan to rent for a week, that price will be different than a month, or even a year.
Just be sure to do the research!
Advertise Your Property
You're almost there! Once you know your price, have your insurance, and have the place ready to go, you'll need to advertise your property.
You could consider putting it on a property management company website to get the word out about it. You can also create your own ads in newspapers, magazines, on Facebook, and in other ways as well!
So How Do You Become a Landlord?
Now that you know the answer to the question "how do you become a landlord?", you'll be making passive income in no time!
While property management and real estate investing can be daunting, it can be one of the best decisions of your life.
If you're ready to get started and want to get your foot in the door, contact us.