When it comes to wealth creation, nothing comes close to owning real estate. And once you begin the process of accumulation, real estate becomes your best bet.
For this reason, one smart strategy to create a successful real estate portfolio is to hold onto your original home even after you buy a new home.
And when you are residing in Edmonton, Canada, you have more reasons to rent your home than anywhere else in the country. It’s because more and more people are now preferring to live in a rented home instead of buying a new one. For this reason, it’s a perfect time for you to rent your first home when you are getting ready to live in your new house.
However, the difficult part is getting started because many of you may not be comfortable with the idea of becoming a landlord and dealing with tenants from different walks of life.
Here are a few valuable tips that can help you find your very own rental treasure trove to bring you out of this dilemma.
Get Familiar With the Laws
Apart from maintaining your property to the safety and building norms, there are many local, state, and federal laws that you’ll need to abide by after becoming a landlord. It further involves a wide range of ranging from tenant communication to leases.
As a result, you may want to hire a real estate attorney to assist you in planning your lease and other crucial documents that ensure your safety and are enforceable when needed. Also, when you find yourself in legal trouble involving your property, the assistance of an attorney with the real estate law edmonton will come in handy. Working with someone well-versed in the law’s language can make your life a lot easier when you are a landlord.
Additionally, keep in mind that you can be held accountable for tenet or visitors’ injuries, making sure you are insured against such claims. These are landlord property insurance and landlord liability insurance, to name a few.
When you bought your first home, you may not be thinking of renting it in the first place(if you were, then your time has come!). Since any home can become a rental property, price and amenities are two main ingredients that will ensure your success as a landlord.
First, let’s go through the price point. You would want to make sure that will become a decent source of income for you. In a nutshell, the rent you’ll be receiving after placing your home on a lease at least enables you to pay for taxes, mortgage, general maintenance, and insurance.
Mark Ferguson, a famous real estate investor, and broker say, essentially, a well-furnished rental property can be anywhere between $70,000 to $200,000 price segment. “With a more expensive home, the rent that someone is willing to pay often won’t keep up with the value, which means you may begin to lose money. And with a cheaper rental, you may run into maintenance and turnover issues,” he further adds.
To decide the right amount of value to set as he rent, look for rental properties in your vicinity and compare your set amount with them. This will give you a clear idea of the amount to be established as a lease perceived as lucrative by anyone looking to rent a home.
And keep in mind that you’ll need to pay for the mortgage even when your property is inhabited, so be sure not to set the lease so high that you push yourself out of the market.
The key to successfully renting a home is its proximity to amenities like dining, shopping, facilities, and public transportation. People mainly prefer Homes close to hospitals, military installations, schools, and colleges since everyone wants to live in a vicinity with the maximum number of facilities near their home.
A location close to significant corporate headquarters can offer the same advantages since office employees often look for a place to rent before owning a home in a new area.
Advertise Your Rental to Get the Right Tenant
Most of the time, the old and reliable standbys are your best bet for finding new tenants for your property. However, that doesn’t mean that’s all you should do to find the right tenant for your home.
With technological advancements, you can make good use of your social media channels. You can list your home to rent on the Facebook marketplace, which the renters heavily favor. Another way is to put your property renting ad on Craigslist. While it still has a tremendous amount of traffic, you can also write down your preferences for a tenant in your ad.
However, if you lead a busy lifestyle and don’t have time to keep track of social media, talk to a real estate agent. They will charge you a nominal fee, which varies depending on market conditions, individual brokers, and several other factors. But, with their knowledge and expertise, you get to save a lot of time and hassle.
And how do you find a suitable tenant for your property? Be sure to meet them in person to get an idea of their personality. You can ask them about their jobs to know about their financial situation, employment history, and credit score.
You also may want to run a background check on your potential clients. It’ll help you know their state and federal background and if they have any criminal history. Additionally, it’s an intelligent way to learn about a person and their history. This information becomes even more valuable when you are trusting an unknown person to rent your property.
To Sum it Up
If you are already a homeowner and planning to shift into a new home, renting your property is the right thing to do. It can help you accumulate a decent amount of wealth in a short time. Besides that, it can act as a passive source of income for you.
However, before renting your property, you need to keep a few things in mind that can assure your success as a landlord. The reasons mentioned above will help you gain that knowledge. Make sure you tick all the boxes before you begin your role as a landlord.