5 Tips To Be A Successful Landlord
The demand for rental stock is rising. Being a landlord is a good way to accumulate wealth. As it is true of every other business, renting out property demands a certain set of skills and expertise. Purchasing property to rent it out by itself does not ensure profitability. For property to be attractive to tenants, they should find the location and other aspects appealing.
Here are a few tips to become a good landlord:
Start small by buying a single home. In the beginning, it will be difficult to manage repairs, bookkeeping and other work related to renting out properties. Purchasing a single home will make the job easier for you. Buy properties in neighbourhoods that have a sound infrastructure. It is always better to choose a locality that has a low crime rate, reputed schools, good healthcare facilities and sound connectivity.
Get professional support
To start well, you need the support of professionals. Hire a real estate lawyer who will help you understand the rights of tenants. This is very crucial because any ambiguity in the contract will lead to problems. Get a team of plumbers, accountant, electricians and other tradespeople. This will help you serve your tenants more efficiently. Another option you have is to hire a property management company. Such companies assist you with services like regular cleaning, property marketing, possession takeover, tenant handover, inspection, professional cleaning, visit management, utility bills and rental chase up.
Manage your finances well
You must have enough financial resources to get your business off the ground. Apart from the start-up capital, you must save money to carry out unexpected repairs. A problem can come up at any moment, and you should be ready to handle it as well as possible. Set money aside to carry out operations successfully.
Find good tenants
Selecting a good location to buy a rental property is important. But finding good tenants is equally important. It is important to choose tenants with a good credit record. You should verify the income statements and state of employment of your tenants. Check the history of your tenants with their previous landlords. Find out whether there are bankruptcies, evictions and civil judgments against them. Carry out a criminal background check. Choosing good tenants also allow you to charge reasonable rents.
Learn more about tax laws
Income from rental property is taxable after deducting municipal taxes. You are eligible to the standard deduction of 30 percent of the taxable income. You are eligible to this on account of any maintenance or repair. The interest paid on a loan taken for repairs, construction, acquisition or renewal of the property is also deducted. Moreover, under section 80 C you are eligible to a deduction against any repayment of principal amount against housing loan taken for the rental property. The maximum deduction you are eligible to is Rs 2 lakh.