Rental homes in Portland declined 14% from 2017 to 2020, which has left many residents becoming accidental landlords.
Do you find yourself in this situation? If you're an accidental landlord, there's an opportunity to earn a lucrative rental property income. But how do you succeed as an accidental landlord?
This guide will show you how to turn your home into an investment property. You can succeed regardless of the conditions of the real estate market.
Here's what you need to know:
Consider Landlord Insurance
Your first step should be to buy landlord insurance for your property. This insurance covers issues that your tenants aren't usually liable for.
For example, a renter isn't responsible if a large appliance malfunctions. Landlord insurance can cover the cost of repairing such an appliance. Likewise, landlord insurance will cover costs for damages resulting from an Act of God.
Finding Potential Tenants
The next step is to find potential tenants. You should conduct a background check to ensure the tenants have a clean record. You should also ask them to provide proof of income.
Make sure you also feel comfortable with the tenant. Even if they can pay your rent, you'll have a bad working relationship with them if you don't see eye-to-eye.
Before signing a lease agreement, make sure you understand your landlord responsibilities. You should conduct frequent rental property inspections to ensure the property is suitable for living in.
Accounting Responsibilities
You should ultimately hire an accountant to help you track your earnings and expenses. But your first priority should be to understand the basics of bookkeeping.
Keep track of your rental income in one column. In another column, keep track of all expenses related to the property.
Examples of such expenses include:
- Maintenance and repair costs
- Professional cleaning services
- Rental property inspections
- Taxes
- New/replacement furniture, appliances, etc.
- Decor, furnishings, etc.
- Travel expenses
Your accountant will help you assess your financial health. They'll keep track of your profit margin. They can also advise on how you can increase your profits.
Your deductions can also be used to save on taxes. Professional accountants will advise you on which deductions are eligible.
Hire a Property Manager
Becoming an accidental landlord offers opportunities but can also be a major strain. A property manager can handle the challenging aspects of being a landlord for you.
For a small fee, they'll help find tenants, conduct property inspections, collect rental payments, etc. They'll lift the burden off your shoulders and are even used by professional landlords.
Accidental Landlords Can Succeed
Most of us don't ask to become accidental landlords, but it doesn't have to be a daunting experience.
Make sure you first buy landlord insurance. This will cover the costs of any damages that your tenants aren't responsible for. Take your time to find the best potential tenants. You'll also have to understand your responsibilities toward them.
As a landlord, you'll also have to keep track of earnings and expenses. It's always best to hire a property manager to assist you.
With consistent positive testimonials, PropM Inc. is the best property manager around. Contact us to hire your property manager.
