Are you ready to become a landlord? Owning rental properties is an excellent investment opportunity, but it takes a lot of work and comes with its fair share of risks and annoyances. Bad tenants can leave you with thousands of dollars in damages, and taxes and costs may be much higher than you initially plan. However, if you’re determined to be a landlord and choose the right properties, there is a lot of success to be found.
Who are your Tenants?
The most important lesson a future landlord needs to learn is that the quality of a tenant matters. If you have an excellent tenant that takes pride in their home, keeps it in excellent repair, and rarely bothers you for help, it can be worthwhile to keep their rent low. Don’t have your own terrible-tenant story to share before learning how to tell a good tenant from a poor one. Buying in good neighbourhoods with low crime rates and above average schools will likely attract families who will treat your property like a real home.
Budget Carefully.
Everywhere is different, but the property tax you’ll need to pay on a home that is not your primary residence is likely going to be a lot higher than you’re used to. The rent in the area you want to buy in should be high enough to cover taxes, utilities, the mortgage, and give you a little extra. Damages and repairs can be extremely stressful when you’re just beginning in the landlord business, so make sure you always have enough capital leftover to cover any unforeseen expenses.
Find an Agent.
Once you know how much you have to spend and which neighbourhoods interest you, it’s time to find an agent who can guide you in the right direction. Once you’ve bought your 5th or 6th property, you’ll be a veteran who can take purchasing a new investment in a stride, but for now it’s important to have someone on your team that knows the real estate game. Your agent can guide you towards the best areas and give you the expert advice you still need — did you know a cul de sac is the preference for families with young children?
If becoming a landlord is your goal, then you’ll need all the help you can get when you’re first starting out. A realtor is obligated to act in your best interest, and I’ve been working in the Calgary real estate market for decades, so you’ll get to benefit from years of experience during your very first purchase. Prepared to find your first investment property? Contact me today!