Thinking of Becoming a Landlord? Consider These Things First!
Becoming a homeowner of an investment property can be a great financial endeavor, but there are many things to consider before you start purchasing and renting out properties. Here at the Tulsa movers, we want to make sure you know what you are getting into when it comes to renting out a property. Keep in mind these homeowner hints before you take the plunge into real estate investment properties.
Check zoning issues. Not every room can be rented simply because it is vacant. Municipalities and zoning laws can be strict on tenants in a single property, whether its divvied up into individual apartments or not. Building a secondary suite without obtaining the right permits can be a mess for you too, so make sure you review what legal permission you need before making rental quarters out of a particular property. Get up to date on fire codes and any other regulations that might hinder your ability to rent space before you make the commitment of buying a property that you can’t do much with.
Rent is taxable. You might not have thought about it, but rent obtained by tenants is taxable income that you have to report to the IRS. Whether or not they write off rent as an expense, it is taxable and needs to be recorded as such. Landlords face other expenses too, such as property tax, home maintenance, appliance repairs, and more. You’ll want to have money set aside to prepare for these unplanned expenses as they arise.
Be prepared for tenants you may not love. Background checks are an ideal way to screen potential tenants, but there’s not a lot you can deny someone for without violating tenants’ rights. Prepare for noise, pets, children, cars and motorcycles in the driveway, and potential yard deterioration. Be sure that the water heater and electrical voltage are both equipped to fit the amount of people in the home or apartments.
Being a landlord is a part time job. When things break, tenants are waiting and relying on you to fix them. It’s not just about pocketing extra money, as being a landlord means you are on call, you have a slew of laborers you trust to fix faulty items, and you keep the space in great condition for current and future tenants.