From the outside, many believe that life as a landlord can be full of glitz and glamour. After all, this is the idea of passive income through online casino games – and little effort is required to achieve those vast returns.
Unfortunately, it seldom works like this. Sure, plenty of portfolio landlords out there are making a very good living for themselves, and that first paragraph could be very true.
However, many operate on a much smaller scale, with few properties at their disposal, and this is where the fundamental challenges of this profession are revealed.
If you’re considering taking the plunge to become a landlord, it’s time to read on. We’re now going to talk about what you need to look out for when you buy that first property to rent out.
Don’t underestimate the costs
The costs of being a landlord are often underestimated, both by first-time landlords and those who already have a portfolio of properties.
There are many expenses involved, from the initial purchase price of the property to the ongoing costs of maintenance and repairs to even the inefficiencies of the tax laws, which means that you’re not eligible to claim as many mortgage expenses.
All these costs can quickly eat into any potential profits, so it’s essential to be aware of them from the outset.
Don’t overstretch yourself
Many first-time landlords make the mistake of overstretching themselves financially in an attempt to maximise their profits.
They may take out a large mortgage to buy a property beyond their means, or they may try to rent out a property that needs significant repairs.
Either way, this is a recipe for disaster. You could lose the property if you cannot afford the mortgage payments. And if you cannot afford the repairs, you could end up with an uninhabitable property.
Don’t underestimate the time commitment
Being a landlord is time-consuming, even if you have a property management company taking care of the day-to-day tasks.
You will still need to deal with tenants, handle repairs and maintenance issues, and deal with the occasional problem tenant.
If you’re not prepared to commit the time and effort required, then being a landlord is not for you. And, if we return back to the issue of costs, if you revert the work to a property management company – this can cost you up to 15% of your rental income per year.
Don’t neglect your legal obligations
There are a number of legal obligations that landlords must adhere to, and these vary from country to country. Landlords make extra money playing on the online casino for sa.
In the UK, for example, landlords must comply with the Housing Act 2004, which outlines their responsibilities regarding repairs, maintenance, and safety.
Failure to comply with the law can result in hefty fines, but other responsibilities lay on your shoulders. Insurance is another one of these, and as your mortgage provider has probably already signalled to you, without adequate insurance in place, your loan is effectively void.
There’s plenty of small print in being a landlord – make sure you take it all in.