You have two choices when you buy a property for commercial purposes. Either you can develop it and then flip it on the market. Or, you can keep it and lease it out. It’s this latter choice that we’re going to explore today. There’s a lot to think about before you become a landlord. You need to make sure that you are ready for the challenges that lie on the horizon. As well as this, it’s important to avoid legal problems too that could ultimately end up costing you a fortune.
So, let’s explore some of the things that you need to be aware of as a new landlord and the steps you should take.
First, you need to make sure that you are choosing the right finance options for your property. If you are going to become a landlord, then you might not have the money to buy the property outright, you’ll need to borrow. It’s essential that you can afford the cost of doing so. If the cost is too expensive, then your investment will suddenly become unstable.
Depending on where you are there could be lots of possibilities worth exploring here. For instance, you might want a HDB loan. The right loan will deliver the benefits you need while providing you a manageable level of interest.
Don’t be afraid to use a broker when buying a property to let as well. The right broker could help you find a property deal that is going to give you the benefits that you need. Crucially, without a broker a deal like this might not have been available to you.
As a landlord, you must understand the concept of premises liability. Premises liability will determine where your responsibilities begin and end as a landlord. Essentially, you could be held accountable for anything that happens in the property including potential injuries or accidents. Due to this, you need to make sure that you are keeping health and safety levels at the right point. Now, you can be hands-on with this approach. Or, you can think about hiring a person to complete this job for you. If you use a property manager, then they’ll usually take care of all this for you and it will be covered in the cost. Although, you would certainly be wise to look for the right insurance solution. That way you can cover any repairs or issues that might crop up at any point.
Don’t forget that premises liability goes beyond covering issues with health and safety. You need to think about things like security as well. If you don’t hit the right boxes with security and something happens, then you will be open for legal action against you.
Next, you need to make sure that you are ready to handle issues that you can have with tenants. One of the problems that you might have is a tenant causing damage to your property while you are living there. To deal with this, you should think about getting the right deposit. A higher deposit may turn off some renters but it will provide you with the financial security that you need.
Again, if you hire a property management team, they’ll likely handle all the issues that you have with tenants.
Finally, it’s important to be aware that there is a learning curve to being a landlord. You won’t get everything right the first time. But that’s okay because by learning from your mistakes, you can improve your position and ensure that you are not letting your tenants down. Of course, if you do constantly make the same mistakes, then you could earn a bad reputation on the market.
If you do develop a bad reputation, then you will need to ensure that you are taking steps to improve the situation. Otherwise, you are going to struggle to get people who want to rent out the properties that you own.
We hope this helps you understand everything that you need to know about becoming a landlord. If you take the right steps here, then it could be a profitable venture. That’s true regardless of whether you decide to treat it as a side hustle or even a full-time career. One thing to note is that a landlord is always going to be a hands-on experience. Even if you decide to hire a property manager, you are still going to need to make sure that you fulfill your responsibilities.