Do you currently have an investment property that’s just sitting there stagnating? Maybe you’re considering buying a house purely for getting onto the property ladder and you want to invest and rent out. Maybe you’re planning on turning your current home into an Airbnb and going travelling.
Before you decide to jump on the property investment train, you need to think about what goes on behind the scenes of a property investment and whether it’s going to be easy enough for you to manage.
Sure, you can hire a property management company to do it for you, but that doesn’t mean you are ignorant to the insurance and outs of what goes on when it comes to renting out investment property. Here’s what you need to do before you start renting out your investment property to new tenants.
- Get your property ready to rent. The first thing that you need to do is get your property ready for a rental. So you need to engage with the property management company to help you to do this. One of the easiest things that you can do is put yourself in the shoes of a potential tenant so that you can see what your property looks like and what changes you’d like to make. You may have to invest a little bit of cash to get this happening, but once you’ve started investing it, you won’t regret it.
- Make sure that you have the correct insurance. There is a different insurance for an investment property than there is for a standard property that you live in. As a landlord, you’ll want to protect your property against any loss or damage which can happen. This is where insurance comes in. You’ll need landlords insurance and building insurance to ensure that your rental property is going to be in good condition year round. Landlord insurance will cover the damage to the building and loss of rental income due to tenant damage. You’ll also be covered for liability for injuries or damage to third parties that are caused because of something falling off the roof. On the other hand, you need to have building insurance to clean the structure against vandalism, natural disasters and theft.
- Make your choice between managing it yourself or engaging a company. Ultimately, this is a decision that comes down to you, but a lot of people choose to turn to property management companies just to take the pressure off. A good property manager can offer experience and expertise that you may not understand. Also, if you don’t want to have the responsibility of managing people and tenants, then property management companies are a great placeholder for that for you.
- Know your obligations. Yes, this may be your property, but the moment you rent it out to tenants, it becomes their home until otherwise. It doesn’t mean that they’re the owners, but it’s their home, not yours. This investment needs to have your understanding of it, which means you need to learn your legal and your financial obligations to yourself, to the property and to the tenant.