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| 10 major steps for landlords to follow |
Step 1: Research
Do some necessary research before buying an investment property. Most of the professional investor does that before acquiring one. Research would help you to learn about state and rental low, responsibilities as an owner. Taxes, insurance policies, management costs etc. If you lack proper research the property you bought may not come as profitable as you think.
Step 2: Find Property
Finding a rental property that is perfect for you can be difficult. The key to buying a good investment property is to do your research, find out what types of property is selling around your area. Don’t buy property in place which is unfamiliar to you. You can seek help from the lenders and mortgage insurers. They have valuable data about investment properties in different locations.
Step 3: Register Your Property
After buying your investment property you must register your property to get a business license. To obtain a rental license you should apply to the state or county business department. Get your housing permission from the corresponding department and also register your property with the local tax office. A tax attorney and state business officer may be able to help through license and permit processes.
Step 4: Decorate Property
A well-decorated home will always rent for top dollars. There is always a high demand for the fully furnished rental homes. Paint with natural colours, install high-quality appliance to attract high-end tenants. Consider creating extra bedrooms to rent as group houses, because group houses will always rent for more money than family houses.
Step 5: Select Tenants
Start taking applications from tenants. To make sure you don’t rent your property to the bad tenants perform a tenants screening process and check tenants background history. You should run a credit check to determine debt and late payment history of the tenants. You may collect information from their former landlords. Select the most qualified applicant who is also the best fit for your property.
Step 6: Collect Rent
After you have selected appropriate tenants for your property, make sure to sign a lease and collect an earnest money deposit. It is the best way to make sure that the tenants will stay for a particular period of time. Collect your rent regularly. You can set up an online system to collect your rent. Consider collecting rent regularly rather than one-time rent payments.
Step 7: Perform Repair and Maintenance
The most important part to make your investment property profitable is maintaining it properly. Many landlords often lose their tenants due to lack of maintenance. Act immediately if any repairs needed. It will help you to keep a good relationship with your tenants. You may consider hiring a property manager. Property managers have the necessary knowledge and resources to act on repairs and maintenance. They are capable of finding any errors including bad tenants and can research for you to grow your business.
Step 8: Pay Taxes
Don’t forget to pay your regular taxes otherwise, the state will sue your property. You should file a tax return with your state government. Pay your local license fee and annual property taxes.
Step 9: Get Proper Landlord Insurance
Damages can be done to your property anytime by natural disasters or manmade disasters. Make sure that you take a proper landlord insurance cover for your property. Landlord insurance is designed to protect rental properties from the damages and rental losses. With help of the best value landlord insurance, you can save hundreds of dollars and that could be a lifesaver in case of any accidental events. A landlord insurance can cover you from the following cases:
- Natural disasters like flood, earthquake, tsunami, storms etc.
- Manmade disasters like fire, riot etc.
- Damages by tenants
- Burglary or theft
- Malicious damages
- Legal Liability
Before taking a landlord insurance from an insurance agency or broker you must compare prices with different companies. Take the insurance which is the best fit for your property and always go for the low insurance quotes. For more information about landlord insurance talk to the specialists at St George Underwriting Agency.
Step 10: Repeat
Follow all the steps one by one and implement them carefully. These steps repeat every time you buy a new investment property. To become a successful landlord initiate these steps and mental processes. Grow your profits and buy another rental property and repeat this cycle over again.
Though investment property is a great source of cash flow it is a risky business at the same time. But you can eliminate the risks if you implement all the processes discussed above. A rental property can pay for your retirement and you can leave a financial legacy for your family.
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