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Financial Freedom: How to Become a Landlord

Author: Jaylin Khan
by Jaylin Khan
Posted: Aug 11, 2020
rental property

Becoming a landlord is one of the best ways for you to quit your day job finally. You will be able to collect monthly rental income. The journey to becoming a landlord does take hard work, but will ultimately be worth it if you finally want to get rid of your day job.

Top tips to help you become a landlord

The best way for you to become a landlord will involve following some of the following advice. The closer that you can stick to you this advice, the more quickly you should be able to become a landlord.

Save up for a down payment

You first need to purchase a property if you want to be a landlord, and the first step on this journey is to start saving up for your down payment. Find out what do you think your final budget will be and then take 20% of that. Continue to save money until you meet 20% of the total cost of the property you would like to purchase.

Locate financing for your real estate property purchase

After you have completed saving up all of the money you need for your down payment, you can begin to look for finance partners. Different finance partners will give you different financial terms, and you should try to find the best deal available for you. Saving even a small amount on the interest will add up significantly over the lifetime of the loan.

Find a good real estate market to purchase your rental property

Investing in real estate is a good idea as long as you are purchasing property in a decent market. If you purchase a home in a market van that does not have many renters, you could end up sitting on the house without any tenants for months.

Do you want to purchase a rental property in areas that will almost always be fully occupied if you guarantee that your revenue streams will be the greatest?

Closing on your rental property

After you have located the property you would like to purchase, you can then make an offer. After you make an offer, if the seller decides to accept it, you can start the closing process. The closing process can take several months, but once it is done, it will be officially yours.

Getting your new rental property ready to move in

Now that you own a new piece of property that you will be using to rent out to tenants, you need to make sure that tenants are ready to move into it. Go through the entire property and clean it from top to bottom. Take pictures of everything, and you go through. The pictures will give you evidence of any issues where the tenant causes damage but denies their responsibility.

If you have images of what the property looks like before moving in, you will be able to prove that the damage was caused by someone who is currently living at home. This can help you out significantly in terms of liability.

Managing your first pair of tenants

Being a landlord is not the same as being completely retired because you do you have some work that you need to manage.

If your tenants ever have any issues, they will be calling you first. As a landlord, it is your responsibility to ensure that all of the house's basic functions to sustain life are functioning. If there are any damages to the air conditioner, for example, you will be responsible for replacing it promptly.

Common mistakes that people make as landlords

One of the most common mistakes that people make when they first become landlords is renting out to people who do not have a verified history of the rental agreement. Without one of these, you can't tell if someone will pay their monthly rent reliably or not. The worst thing that you can do with your investment property is to occupy it with someone who goes delinquent and refuses to pay. It can take a long time to evict someone from your house for refusal to pay, and you will be losing money the entire time.

About the Author

Jaylin is a Staff Writer for Bizmaa focusing on business analytics, business systems, gadgets and other small business news. She has a background in information and communications technology coordination.

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Author: Jaylin Khan
Professional Member

Jaylin Khan

Member since: Jan 25, 2019
Published articles: 44

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