I'm reading on Sunday morning before it's time to head out to meet clients. This morning an article about investing caught my eye so, of course, I share some highlights and a link to the full article.
Most important is that someone who is considering becoming a landlord needs to be very aware of the expenses associated with rental property. It's not just a 'watch the money come in' scenario.
I was a landlord years ago, hated it. But, it did help with my income taxes, so for 8 years we tolerated it. But, the stress of owning something so far away was challenging so we let it go. Now, I wish I still had it.
Recently, I became a landlord again. Felt that for my retirement, Real Estate was a good investment. But, fortunately for me, I knew what kinds of pits I'd possibly fall into. What types of costs I may entail. How a tenant may react. So, I was ready.
The old adage that plan on having the unit rented 11 out of 12 months I believe still holds true. Also, if you are purchasing a new property to turn into rental income, you have to determine ALL costs associated with the purchase and what your continued costs will be to make certain that the investment will be, at least somewhat, profitable for you.
Renters like nice places too. Hi-end rentals should be expected to be kept very well maintained. And, there will be expenses associated with that maintenance. There will be tenants that seemed good, and turn into a horror. Move swiftly on your actions to remedy a bad tenant. Be certain to follow all the laws when writing your lease agreement. Keep money aside for repairs and move-out costs as well.
In this year, 2011, I believe the most important thing to note about becoming an investor/landlord, is that, right now, there are a mother-load of tenants out there. True, their credit isn't the best, by far, but there are a lot of prospective tenants out there. Now, fast-forward a few years when people are buying again that lost their homes.....hmmm.....there will be many vacant investment properties. Some will get sold, some will go vacant.....and many will have to reduce their rates to get those few tenants into their property.
Make sure you can afford it.
Just like stocks/bonds, Real Estate is an investment for the long-run. Yes, some do make money flipping houses, but that's not a regular scenario. Long term investment in stocks/bonds and Real Estate....that's the ticket.
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