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Wanna Be A Landlord? Rental Properties 101

December 2, 2014

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There are many great benefits of owning rental properties such as tax deductions, earning equity while someone else cover the mortgage and of course an additional income source.  It isn’t always a positive endeavor.  Be prepared for headaches along the way.  If you plan on diving into a career as a landlord you should be prepared for the long haul.  Some of the issues you will deal with include:

  • The tenant may be either compulsively late or won’t pay rent (know your states eviction process and always charge a late fee to force them to make the rent a priority)
  • The tenant will trash your house since it isn’t their own home (make sure your deposit is adequate to cover any costs to repair)
  • The tenant won’t pay their utilities and you will encumber the loss as the owner of the property (authorize with the utility company’s to put the utilities in the renter’s name)
  • The tenant will constantly request for repairs (learn to become a handy man and save $$$ – YouTube & Home Depot will become your best friends)
  • The neighbors will complain about your tenants (meet with the neighbors and introduce yourself as the owner and give them your information if problems arise and make them your allies)

Some other tips for a success:

  • Never, ever, ever rent to friends or family!! This is critical to avoid any heart attacks.
  • Keep accurate records for rental history, payments, maintenance, etc.  The more organized you are the better off you will be. If you aren’t good at maintaining records then hire a bookkeeper or tax preparer.
  • Make sure to file accurate figures on your taxes (Sched E).  Showing income and depreciation is critical for your future financial applications for any type of credit.
  • Military, Teachers, Fireman, Police and Government Workers make the best tenants.  They have to maintain a good credit history for their jobs.
  • Make sure to do accurate credit, background and reference checks.  Don’t be lazy….it will bite you in the behind later.
  • To avoid vacancies it is best to buy rental properties that are located near schools, grocery store and have easy access.

Some other great articles we found online:

http://www.nolo.com/legal-encyclopedia/landlord-pros-cons-29494.html

http://www.forbes.com/pictures/mhj45ifmh/introduction-17/

http://realestate.about.com/b/2014/02/07/real-estate-investment-analysis-spreadsheets.htm

PMC offers free credit enhancement prior to submitting your loan to the bank to ensure you get the best rate possible.  Even 20 points could be .25% better in rate, which equals thousands of dollars on the life of a mortgage loan.  If you have a loan scenario email us at info@pmccanhelp.com – PMC Can Help!

Get Help From the Experts.  Platinum Mortgage Company offers Stated, Low Doc, Alt-A, Sub-Prime, Non-Prime and Bank Statement Home Loans.

Visit Our Website:   http://www.pmccanhelp.com

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