It reaches a point in life where most people desire to be landlords, and their main aim is to reap maximum benefits from the land they acquire. Moreover, as you retire, being one is a viable option since you’ll be getting rental income in the comfort of your home.
Even so, you need to know that when you become a landlord, you assume a managerial position, which comes with responsibilities. You probably may think that being a landlord is lucrative, seamless, and satisfying. Well, that’s true, but it comes after lots and lots of hard work. You don’t build rentals, allow tenants to occupy them, and sit back, waiting for them to pay the rent every month without doing anything. As long as you’re not part of a real estate crowdfunding platform and the like to help offset the burden of owning and managing property, there’s a role you need to play.
As a landlord, you need to know that you’re the one to hire and pay professionals to handle issues like leakages, electrical problems, and any repairs. Thus, it’d help if you regularly visit your property from time to time. There are certain tips, however, that you can employ to enable you to manage all your obligations in a better way.
Here’s how to become a landlord without headaches:
1. Hire A Property Manager
It’s possible that you purchased land and built rental property far away from where you currently reside. Thus, going there every day may be draining and costly. Apart from that, you may have a busy schedule at work; therefore, balancing work, your family life, and managing the property may become difficult.
When you find yourself in such types of situations, this is the time to hire a property manager. This professional will make things easier for you by handling tasks including:
- Making lease agreements
- Ensuring that tenants are comfortable
- Looking at the history and records of potential tenants
- Supervising repairs
- Regular maintenance of the property
- Supervising other employees like plumbers, if any
- Preparing financial reports, like budgets, expenditures, and analyses
- Financial management by ensuring that there’s proper allocation of cash, for example, in paying bills
After the manager does these tasks, they’re supposed to give you regular reports about the actual progress. One thing you need to consider when hiring this professional is that they should have a good track record and are qualified. You also need to involve a lawyer when hiring this person and give the property manager a contract with a list of responsibilities they’re supposed to handle. If this person is not trustworthy, you can deal with them legally with the lawyer’s help.
If you find that working with a property manager doesn’t work, try another option. It’s possible to become a real estate investor without managing properties, and you can achieve this through any real estate investing apps. Try checking them out to see whether it’s an arena that you’d like to dive into.
2. Try Real Estate Investment Trusts (REITS)
Real estate investment trusts are companies whose primary interest is investing in assets like hotels, office buildings, shopping center’s, and rental properties. They can help offset the burden of screening and following up on your tenants.
These companies are exceptions because they’re not required to pay corporate tax. However, for any real estate investment trust organization to be exempt from corporate tax, it must pay its shareholders more than half the total taxable income.
Moreover, it’s mandatory for these companies to invest three-quarters of their assets in real estate. For a company to be called REIT, three-quarters of its total gross income should be real-estate-related, for example, rent or mortgage interest.
One thing that you’re sure about if you leave your property to real estate investment trusts is that you won’t have to deal with the headaches of deadbeat tenants, managing repairs, and generally taking care of the property. Moreover, some of these companies can upgrade your property. Some of these improvements include:
- Adding street lights around the rentals
- Making your rental property part of a gated community
- Enhancing safety by hiring security guards
- Planting flowers around the area to make it more attractive
By liaising with a REIT company, you’re sure of receiving around 90% of the taxable income that they’re going to make. Thus, you’ll still gain dividends by being a shareholder in such a company. This is a good way of making an investment and becoming a landlord without headaches.
3. Get A Property Upkeep Company
Whether you own multiple properties in various places or have one, getting a property upkeep firm can come in handy and save you the hassle of one-on-one interaction with your tenants. Some of their responsibilities include:
- Planning and handling repairs
- Dealing with any complaints from clients
- Handling routine jobs, like landscaping and cleaning
- Giving you weekly reports of what’s going on
- Ensuring that tenants pay their rent on time
- Informing new tenants of the rules and policies that they’re supposed to follow before they occupy a house
Ideally, such companies have qualified professionals, like plumbers, who’d immediately step in to fix anything to do with leakages or faulty water systems whenever they notice them. Moreover, they can provide you with a property caretaker who generally assumes all the above tasks at a fee.
A property upkeep company aims to help landlords alleviate the stresses of managing properties and take care of all major and minor issues. Regarding payment, it’s your role to find a company whose terms you can abide by and with whom you can share your income based on the contract agreement. That way, you’ll be sure that the company will take good care of your property.
Being a landlord isn’t easy, and there are so many responsibilities that you’re supposed to take care of. Examples include:
- Dealing with tenants who miss payment deadlines.
- Hiring people to do repairs.
- Dealing with complaints from renters.
If you want to save yourself the hassle of dealing with all that, you can hire a property manager, become a real estate investment trust company member, or hire a property upkeep company. Regular property visits are also advisable to help you monitor progress. If you’re wondering how to become a landlord without headaches, try the above options today.