If you’re thinking of becoming a landlord, usually a few things have happened: either can’t sell your place because you’re underwater, you’re getting relocated for a job but plan to come back, you’ve decided to put real estate into your portfolio of assets, or some other life decision has forced you out of the place you call home. Either way, you’re no longer going to be occupying your property and need to find some reliable tenants to help subsidize your mortgage, or pay for all of it 🙂
How will you manage the property….what if repairs need to be made? Who will you call?
How do you find tenants? Do background and credit checks? Handle disputes?
How do you collect rent?
Option 1: Going Rogue.
If you’re handy or have reliable resources for repairs, should the need arise, perhaps you should consider going rogue. If you’re local and can easily access the property, you can save yourself some money. Finding a tenant can sometimes be a headache, but with local resources like Craigslist, MilitaryByOwner.com, hotpads.com, and trulia your exposure can be widespread. You’ll have to check backgrounds, verify employment, and negotiate lease terms on your own.
Option 2: Using a Realtor.
Every broker is different and has different policies on landlord/tenant policies, so I will only speak from my point of view as an agent with Keller Williams Realty. Generally, we will market the property, accept and process applications, do a background/credit check, and write the lease on your behalf for a 1-time fee (this fee will also vary from agent to agent.) Repairs, rent collection, etc are all up to you. We get you a qualified tenant and then step out of the picture.
Option 3: Using a Property Manager.
The “throw money at it” solution. Property managers generally collect a fee, or percentage, each month to manage properties. They handle finding tenants, qualifying them, any/all repairs if any arise, and rent collection. Potentially expensive, especially if your gross monthly rent doesn’t cover your mortgage each month, but will offer the smallest headache for being a landlord.
Just remember – the best tenants are the ones you never hear from. Take time to get the property ready for tenants before they occupy, qualify them to make sure they’ll be responsible, and hope and pray you get paid on time each month. If you want help with any of that, email or call me!