So, you’ve spent most of your life saving up and increasing your net worth. You already have several sizable savings accounts and several properties under your name. You’re torn between disposing of some of the properties since you’re no longer using them, but you’re also wondering if it’s better to lease them.
If you’re a first-time landlord and have tons of questions about the dos and don’ts of being one, then this article is for you.
Unless you’re a savvy investor who buys and sells properties with little emotion involved, selling a property, especially one you grew up with, can sometimes be hard. Imagine letting go of a part of yourself forever. However, you also have to weigh the fact that keeping it can be costly, especially if you seldom use it. So, what’s the alternative? You rent it out, of course.
Leasing your property does not only answer your sentimental concerns (you end up keeping the property after all) but also takes care of the upkeep of the said property through the rental payments you’re getting.
The following are a few questions to ask to find out if you’re ready to become a landlord/lessor.
Do You Have a Network?
Becoming a landlord means you have to put the word out there. You need the world to know that you have a property for lease. Aside from advertising, you also have to allot some time and effort to show your potential lessees the property, answer their questions and concerns.
If you don’t have a network, leasing the property might take some time. Fortunately, there are dozens of real estate brokers within your community that might be able to help out for a fee.
How Much Can You Get from Rent?
Remember that part of the reason you’re considering leasing out the property is to take care of keeping it up. So, this means you have to crunch some numbers to determine the ideal rent.
However, this doesn’t give you the authority to set an arbitrary price for rent just because you “feel” like doing so. You also have to consider the rental payments of similar properties within your community. That is if you want your property to be leased right away. If you go beyond the average rental price of a similar property, then chances are, no one will consider renting it because it will be too expensive.
Similarly, you cannot drive down your rental rate just to get ahead. It might attract the wrong type of lessees, and you might have more problems later. Similar to the first question, talking to a real estate broker might be insightful as they would have an idea about the right rental rate you could charge since they know the market within your community.
Be Ready for the Ups and Downs
Being a landlord does not mean you won’t have any problems. If anything, you open yourself to a whole new world with its own set of problems and rewards. If you want to have a passive involvement in property rentals, you might consider hiring a property manager.
These teams will be the ones to handle anything that involves the customers, including but not limited to contracts, rent collection, needed repairs, and other related services. So, the only thing you need to do is offer your property, sign a management contract, and get paid your fair share of the rent. But, of course, their services would involve a fee, so make sure you get a reputable one that’s worth every penny.