Making Your Property Work For You - Buying To Rent

BradYoung04Starred Page By BradYoung04, 17th May 2013 | Follow this author | RSS Feed | Short URL http://nut.bz/1l3lk1mg/
Posted in Wikinut>Guides>Property & Real Estate>General

Property is undoubtedly one of the best investments you can possibly make. The notion of private property is essential to U.S. society, and it has become a very viable method of investment in relatively recent times.

Essentially, the value of land is what gives property its price.

There are many different reasons for this. Essentially, the value of land is what gives property its price. This is affected by the overall population of the area, after all if there is more supply there is less demand.

The actual structure of the property is another determining factor, with some houses being very cheaply made and others not so much.

Buying

The incentive to buy is always going to be there. Everybody wants to own their home. When it comes to investment though, it’s not about that house with the perfect spiral staircase you love – it’s about making money.

Choosing a house to buy as an investment will give you a few options. You can rent it out and use the income to pay off the mortgage, or at least part of it. You could also use the rental income as a revenue stream if you can buy the house outright.

The other alternative is selling it on for a profit after doing some renovations. However, this can be problematic as there is no guarantee the property will be sold for your asking price.

Being A Landlord - The Realities

Being a landlord is an odd thing for those who haven’t done it before. It’s a weird position of power and responsibility. There are a few things that you should be aware of before considering becoming a landlord;

1) You are responsible! - This is the most important thing. If you rent your property to someone and the next day the ceiling falls down, you will be held accountable. You need to make sure you have carried out all the proper inspections and take responsibility for problems.
2) Repairs and maintenance can be expensive - This might be obvious, but you will need to carry out regular maintenance and bear the costs for any repair jobs that may arise.
3) It’s not a hobby, it’s a job - Being a landlord isn’t a particularly fun way to make money, it’s a lot of work. You will have to carry out your duties.

It is possible that you could get a management service to perform most of the daily duties, like carrying out repairs or collecting rent. The main implications of being a landlord are costs and time. Not just repairs and maintenance, you can also get some cheap landlord insurance to cover yourself against liability. Time constraints can be quite limiting. If you have a full-time job then it’s unlikely that you will have a chance to perform all of the duties required of you – therefore either a property management service or part-time work is the only option.

Tenants

Tenants can be tricky. They can be very demanding and also are potentially able to damage your property. Getting a security deposit is the best way to ensure that you don’t have to pay for any damage after your tenant leaves.

They may also have issues like disturbing the neighbors with loud music. You have a responsibility as a landlord to facilitate mediation of any disputes with those living near your property. For example, if your tenants have a problem with loud music you will have to inform them of the problem and insist they desist – or face eviction.

Some issues with tenants are also very awkward. For example, asking for a rent increase. If you’ve bought your property in an up and coming area and average rent value has increased then you can reasonably ask for more money each month. However, telling the person can be difficult – especially if they can’t afford the increase and will have to move out.

It’s hard to get used to the relationship with a tenant, as they are not your friends. All they are is a necessary means for your investment to pay off – looking at someone like this can be a difficult adjustment.

Keeping Investment Alive

There are so many different types of investments. Property is an amazing way to invest, and it can really pay off if you’re smart. Being a landlord is not for everyone, so consider whether or not you are able to make the commitment for deciding to rent your property.

Thanks for reading. I’d love to know what you think so please feel free to comment below. If you liked this then you should check out the rest of my work on WikiNut. I would particularly recommend “Art Deco Buildings In America”.

Image Resources

Image 1 - http://upload.wikimedia.org/wikipedia/commons/d/d5/Maison_en_mains.jpg

Image 2 - http://upload.wikimedia.org/wikipedia/commons/e/e1/Bungalow.jpg

Image 3 - http://upload.wikimedia.org/wikipedia/commons/7/74/CITIB-projektor.jpg

Tags

Becoming A Landlord, Buying To Rent, Invest In Property, Property Investment, Renting A Property

Meet the author

author avatar BradYoung04
I am a MBA grad who can transform your business. Follow me for straight talking insights into running successful businesses in a fast paced world. I am always working or surfing in the Californian sun

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