As experts in rental property insurance, we deal with a lot of landlords here at Vargas and Vargas Insurance Agency. This has lead us to one universal conclusion: not everyone is cut out to be a landlord. Owning a property that you rent out can be a great way to acquire income, but there are some aspects of the title that not every person is suited for.
If you’re thinking of purchasing a property in order to become a landlord, we encourage you to ensure that you’ve done your research before spending your money. Here are some of our tidbits of advice on how to be a successful landlord.
Prepare for the worst.
Being a landlord is not a purely financial transaction. If it were, anyone could do it! Instead, you will need to also invest lots of time and energy into your rental property. Don’t get into the business if you’re not prepared to deal with tenants that constantly have maintenance requests, or don’t pay their rent on time, or generally drive you up a wall with their issues. If you’re up for that, then you may just have what it takes to be a landlord.
Get your finances in order.
If you are ready to buy a property for renting, you need to check and double check your finances. Before you even think about choosing tenants you need to have the following things in order:
- Accounting and recordkeeping processes
- Tax information, including interest, mortgage, and expenses
- Rental property insurance policy (With the help of Vargas and Vargas, of course!)
It is a good idea to recruit the help of a financial professional to ensure that you have all of your financial bases covered, and that you’re not missing anything important.
Formulate your paperwork and policies.
Make sure that you check all of your paperwork over with a lawyer to determine if you are following the proper local, state, and national guidelines. A lawyer can also help you set up an LLC so that you aren’t personally responsible for problems with the property.
You will also need a set of ground rules before you start interviewing potential tenants. Will you charge a late fee for rent? What is your ruling on pets? What hours will you accept phone calls? How often will you be dropping by to check on the property? You can always amend these rules later, but knowing what you will allow and what won’t be tolerated will save you headaches later down the road.
Check on your property.
Later down the road, when you have your property set up and occupied, you need to make sure that you check on it every now and again. This is the only way to know for sure that the tenants aren’t destroying your place or ignoring important maintenance issues. Some landlords prefer to drop by unannounced so that they can see how their tenants live without being able to clean and prepare for a landlord’s visit.
If you’re sold on the idea of becoming a landlord, you need to call 617-298-0655 to speak with a Vargas and Vargas Insurance representative about your rental property insurance policy. We can get you a policy that will protect your new investment without causing you to budget for exorbitant insurance expenditures.