6 Key Things to Research Before Becoming a Landlord
There are many reasons a homeowner may want to rent their current home rather than putting it up for sale. For one, many sellers may not want to risk having to pay for an extra mortgage while their home is on the market. A rental property can also be a pretty reliable source of extra income. No matter the reasons for renting, becoming a landlord can be more complicated than many people realize. Which is why it’s crucial to research these essentials.
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Local Home Trends
Converting your home into a rental can be a major undertaking. Before you make any moves, take a look at local housing prices and sales trends to see if this is your best option. Pay special attention to how long homes are listed before they sell since this will clue you into how hot the market is in your area. If you plan on staging your rental for listing photos you can also look at currently sold listings to see what sort of setup might attract potential renters to your home. You may also want to consult with local real estate professional Theresa Donley before you make a final decision.
Local Rental Statistics
Looking into alternate market reports can give you a better idea of whether rental properties are in demand in your area. For example, the Atlanta area has a disproportionate percentage of renters when compared to homebuyers. So, if you are considering converting a property in this area, you should have a stable flow of potential tenants to help drive up your profits. You can perform a quick online search to find similar statistics for your particular area
Laws Governing Rentals
If you are considering becoming a landlord, your next stop should be to seek legal counsel. Failing to speak with an attorney could put you at risk for violating a code or law, which could result in fines or even jail time. During your session, your attorney will discuss any requirements you must uphold as well as anything required of your tenants. You may also want to ask how the pandemic could impact you as a new landlord. Many states and cities have put rent and eviction freezes in place so it’s crucial to be aware of these rules.
Additionally, you may need to look into the rules and regulations surrounding registering your business with the state. You can find instructions for Wyoming LLC registration online, for example, and formation services can help ensure you’ve completed all the necessary paperwork.
Professional Cleaning Services
Before you list your rental property, you are going to want to get it in shape to impress potential tenants. This means deep cleaning the home from top to bottom, including your floors. If the home is carpeted, you may need to hire professional services to come in and steam clean to get rid of odors and stains. In fact, it may be a good idea to hire professionals to help with other required tasks to meet your landlord obligations.
Handling Payroll
If you need to take on employees to scale your rental business, you’ll need to make sure you’re paying them promptly and accurately. Learn about the payroll process and payroll related terms. You can streamline paying your employees by investing in payroll software, which is often cheaper than hiring an accountant. Look for software that automates recordkeeping, wage calculations, and tax deductions.
Property Management Services
Even with proper research and planning, there’s a lot that goes into setting up and managing a rental property. If you already have a full-time job and other responsibilities, you may want to save yourself some stress by hiring a capable property manager who can help you get your rental property off to a successful start by marketing your home to potential tenants and screening those renters to make sure they will be a good fit. That last part can be especially important for novice landlords, to avoid violating any fair housing laws in your area. You can also ask your attorney to provide additional information on legally screening potential tenants.
Transforming your home into a long-term residential rental property can be a complex process, but it doesn’t have to be overly complicated. You really just need to have the advice and expertise of a few key professionals, including an experienced attorney and a property manager. Otherwise, you could end up with more stress and headache than you bargained for.
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