Some people go into landlording assuming that it's an easy job. If you have an apartment and a tenant, then all you need to do is collect rent each month and in a short time you'll be raking in the cash. The truth is, just about anyone can go into landlording, but to be a success you have to make an investment, and that doesn't mean just money.
You have to be willing to invest in yourself. You should go into landlording with an open mind and a willingness to learn everything you can about the business — before you start and long after you have experience.
As you're just starting off, you'll want to read The Everything® Landlording Book and then devote many more hours to educating yourself by learning from other landlords and through seminars, workshops, and other books. It's best to start your education immediately, before you renovate your home into an owner-occupied dwelling or purchase your first duplex.
You'll also want to find out about federal, state, and local landlord-tenant legislation, as well as local building codes and zoning laws. State and local regulations and the forms that you'll use as a landlord can vary in each community and you don't want to inadvertently include language in your lease or advertisements that can lead to legal hassles.
To avoid trouble, you'll want to develop a thorough understanding of Fair Housing laws. Not all of them apply to small landlords in owner-occupied dwellings, but you'll need to know what the laws are when it comes to advertising your unit, talking to people who apply to rent the apartment, and your tenants. That way you'll be able to recognize what you have to do to help prevent liability lawsuits.
You'll want to have a good understanding of landlord-tenant insurance issues and what you can do to reduce the risk of getting a problem tenant. And you'll want to know ahead of time what your options are for getting rid of one.
It will also help if you look at landlording as a business — one that will take an investment of your personal time. Knowing how to keep records and books that will satisfy Uncle Sam at tax time is just one facet. The other is to know how you can increase your long-term “profit” by using all the tax advantages available to landlords. These include your ability to deduct legitimate business expenses from your personal income, the tax advantages of depreciation on your dwelling and the improvements you make to your property, and the equity you'll build up, as well as the increased valuation you'll realize if you ever decide to sell your home.
The Everything® Landlording Book will give you suggestions about how to adapt your home into an owner-occupied dwelling or buy a rental property. One chapter is devoted to finding a mortgage in a tight-credit market, and ways to finance renovations without taking out a home-improvement loan or borrowing on your equity. You'll get tips about fixing up your property and learn about the laws, codes, and permits that pertain to rental property.
You'll find two chapters dealing with insurance and liability issues. The fact is that landlords have to be aware that they are prime targets for liability claims and it behooves them to know what steps they can take to eliminate the risk.
You'll get tips on marketing your space, showing your property, finding the right tenants, providing a “perfect” home, and making money off your property.
You'll get the nuts and bolts of rental applications, rental agreements, leases, tenant checklists, collecting and increasing rent, and record-keeping. You'll find out what you should do about maintenance and repairs, simple tasks you can undertake that can save you money, and how you can improve your tenant's safety.
Appendix A lists web and telephone resources for landlords and consumers, and Appendix B contains samples of some of the forms from various states that landlords use in their business. You can use them as guidelines, but be sure to get forms that comply with landlord-tenant regulations in your state.
The Everything® Landlording Book will give you a good foundation upon which you can build your new career. It provides an overview of the business from the time you first think about going into landlording or renovating your home to the first time you may have to evict a tenant. It's meant to lead you to the other building blocks that will help you launch a challenging, rewarding “career.”