4 Things to Remember Before Becoming a Landlord

While there are many good reasons to become a landlord, one of the most important advantages is that you’ll have an extra income that you can use to cover your expenses, like your mortgage. This will make it easier for you to hold on to your property as it gains in value.

But while being a landlord can be profitable, it isn’t a straightforward job. Many financial and legal obligations come with the task. Here are some things to be mindful of before entering the rental property business:

#1 You’ll Have More Taxes to Deal With

As you gain more income from your rental property business, you may have to pay more taxes. You’ll also have to deal with more paperwork. However, depending on local regulations, you may also have some of the following tax breaks:

  • Marketing: You may deduct the cost of advertising your rental property.
  • Premiums: You may deduct the cost of insurance.
  • Expenses: Office costs, prepaid expenses, agent fees, property management company fees, legal fees, and accounting fees may be deductible.
  • Taxes: You may deduct property taxes incurred while the rental property was available for rent.
  • Upkeep: Repairs and maintenance costs, including labor and materials, may be deductible.
  • Travel Expenses: If you traveled to collect rent or supervise repairs, you may deduct certain expenses.
  • Utilities: You may deduct expenses for certain utilities that you paid and are specified on the rental agreement.

#2 You’ll Have Responsibilities

As a landlord, you’ll have many responsibilities, depending on local laws. You must ensure that the home is well maintained and follows local health, safety, and maintenance standards. You may also be responsible for the upkeep of common areas like driveways, yards, and hallways. This includes snow removal.

Remember, your tenant must have access to services such as water, electricity, gas, and heat. You can check your municipality’s minimum heat standards for more details.

#3 You’ll Have Rights

While you have several responsibilities as a landlord, you also have rights. You have the right to collect a deposit, and to collect rent in full on its due date. You may also enter the rental property to conduct repairs, maintenance, or inspection, provided that you give proper notice. You can enter a rental property without notice if its an emergency. You may also increase rent once a year if you follow the guidelines.

#4 You Should Select a Tenant Carefully

While most tenants are good and responsible people, you should screen applicants carefully to avoid matching with an undesirable one. If your tenant doesn’t pay their rent on time, damages your property, fails to inform you in case of emergencies, or breaks rules, then you may face frustrating short-term and long-term challenges.

Screening applicants can be a time-consuming process. That’s why many landlords use property management companies. Head over to Propertymanagementto.com to learn about a team of professionals that offer a variety of services to landlords, including tenant selection, tenant relations, around-the-clock support, marketing property management, and more.

These are four things you should remember before entering the rental property business. While being a landlord may be rewarding, it can also be a full-time job. If the rental property business feels overwhelming, then partner with a team of professionals to collect rent stress-free.