Becoming a Landlord – Basics of Real Estate Investing
A real estate investment property (RI) is house or other property used for making residential living units. RIs are frequently referred to as “investments,” or “Second Homes,” “Commercial Real Estate,” “Residential Real Estate,” “Mixed Use Real Estate,” or simply as “RE’s.” They’re especially popular among new home buyers. In the United States, there are many types of RIs: condos, townhouses, single family homes, multi-family buildings, multi-unit complexes and more.
As a landlord, or property manager, you have to pay property taxes, maintenance and repair expenses, and other fees and charges that a property owner must meet. These expenses are usually paid monthly, quarterly, semi-annually or annually. Here is a look at what being a landlord involves, starting with the basics:
Property taxes and maintenance are usually included in the rent. The property tax rate in many states is very high and can easily reach up to two percent or more. This means you will have to pay a significant amount of money to your local government. Property owners are required to pay these taxes on their rental properties to make up for the loss of revenues if your property is foreclosed.
For property maintenance, there are different methods that can be applied. One method, called tenant maintenance, involves collecting the tenant’s garbage from the tenants’ property each day. The garbage is then sent to the owners’ garbage can, and disposed of by the owners. Another method is called landlord maintenance. In this method, the property is maintained and cleaned on a routine basis, usually once a month or every three months.
The landlords, or real estate investors, who do not have tenants but rent to others will need to make sure that they are getting a decent amount of rent. If they don’t get a lot of rent, they can end up having a hard time paying all their expenses, not to mention they can end up losing money too. Rent is the main source of income for most landlords. Some landlords even lease their properties to real estate investors.
Real estate investing can be a great way to make some money. There are plenty of great opportunities to earn cash while owning a property and having some of the benefits of owning a home. Renting to others can help a landlord earn cash. The money that comes in from renting can be used for paying off a mortgage, paying off a personal loan or credit card, paying for other expenses, and many other things as well. Landlords and investors can also take advantage of rental property management companies.