Considerations Before investing in Rental Property
Are you thinking about investing in real estate property and becoming a landlord? If you are, it is important that you know exactly what you are getting into and weigh the costs of that responsibility before actually taking it on. As property managers in Redding who have managed properties all over Shasta County for over twenty years, we would like to help you decide whether or not becoming investing in a rental property and becoming a landlord is right for you by making you aware of the responsibilities and the costs involved.
1. Time and Financial Commitment – owning, renting out, and maintaining a property will be an investment of your time, energy, and money. You will have to put time and labor into keeping the place in good condition, or you will have to hire someone else to do that. Either way, maintaining the property will cost you money out of your pocket. You may also have to take care of repairs or maintenance yourself or hire people to do that. These things will come up, and you must be ready to take care of your tenants’ practical needs to maintain a good relationship with them. Being a landlord is going to require that you set aside money for expenses as well as time to keep the property maintained.
2. Location – location is a massive priority for tenants has when looking at rental properties. Maybe you have found a property that has been renovated but is located in a not-so-desirable part of town and think that the renovations will make up for the location. We would advise you to consider other options before investing. Location is huge for tenants and most of the time, even if the house is nice, if the location is not desirable, tenants will look for other options. It is better to invest in a property that is in a desirable location, even if it is a little bit more of an investment financially.
3. Check State and Local Laws – make sure that you have a complete understanding of all of your state and local laws and that you are willing and can abide by those laws. If you become a landlord and then do not follow the requirements laid out in your location, you could end up with hefty fines or in worst case scenarios; you could end up in court. It is also important that you check whether or not you will have to pay fees or taxes because that will impact you financially and you will need to prepare for that.
4. Hire a Lawyer – creating a lease is a serious manner of business because laws are involved. It is important that you get legal advice on your lease agreement. It would be wise to hire a lawyer to give you feedback and suggestions for your lease so that you know for sure that everything you have laid out abides by the state and local laws and is also fair for your tenants.
5. Maintain Your Property – as mentioned before, you will run into having to take care of repairs and will also need to keep the property maintained and in excellent condition. These are things you will need to have planned out when you become a landlord. It is vital that you not only have the financial safety net in the case that repairs need to be made, but that you also know what companies you need to go to if you need to hire people to make your repairs.
After reading all of these things, becoming a landlord may seem like a huge responsibility, and it is. Becoming a landlord is essentially a business venture, not a hobby. It is an investment that involves risk, and it will take a lot of your time, energy, and money. However, there is a way for you to be a landlord while not having to handle these stressful tasks. You can simply hire a property manager. A property manager will manage all of these tasks for you. They will handle everything you would handle as a landlord, minus the finances needed on your end for repairs and maintenance. They will handle communication with your tenants and will set up and schedule companies to come out and make repairs while you will just extend the finances for it. If you are interested in becoming an Investor and not interested in the part-time job, hiring a property manager would be the best route for you to take, or if you already are a landlord and would like to hire a property manager to take these stressful tasks out of your hands, give us a call at Authority Property Management! We do property management in Redding and Shasta County and would love to manage these responsibilities for you! Call us at (530) 410-6085.
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