There is much more to becoming a landlord than simply collecting rent every month. First and foremost, make sure you have responsible and reliable tenants in your properties. The best way to go about this is to start with a background and credit check.
After you’ve found tenants, it is best to come up with comprehensive lease agreement. In this agreement, make sure to be very clear on all rules. For example, if you want a maximum of 4 people to live in the home, it needs to be explicitly stated. Later, if your tenants have allowed friends to move in, you have the option to take them to court and have them evicted for breaking their lease agreement.
The lease should also include specifics such as the security deposit, monthly rent and due date. Be sure to include particulars on penalties for late payments. Also, it helps to be very specific about what is considered normal “wear and tear” by tenants to avoid misunderstandings at the end of the lease.
Some of the associated costs a landlord must factor in are:
- Home owners association (HOA) fees – these can range anywhere from 20.00-300.00 per month depending on the community your rental property is located.
- Insurance – depending on the type of property it is (home, apartment, duplex or townhouse) there may be special insurance needed to suit the property type.
- Property taxes – your county tax assessor’s office will have will have the exact amount of property taxes previously paid and this will help determine your budget.
- Landscaping – most of the time you will be responsible for this. You can make an agreement with the tenant to make them responsible. Be sure they comply with neighborhood standards and keep up on it to avoid complaints.
- Pest Control –you will mostly be responsible for this service which in Georgia tends to be a necessity. Factor twice yearly costs for pest control, though we recommend exterminating monthly if possible.
As a landlord you are responsible for providing any repairs or upgrades to the property. Some repairs can cost up to 10% of the monthly rent. Appliances don’t work forever. You will need to have funds set aside just for repairs and upgrades.
Most all of these issues can be handled by a property management firm, like My Rent Source. Ask yourself these questions to determine if you would benefit from a company taking care of the dirty work for you. For more information contact us today.