Of course properties could lose value, the market could collapse, equity may not build over time, and cash value can become unstable...
Waltham, MA (PRWEB) August 23, 2012
It all depends on perspective.
A recent article in the St. Louis Post-Dispatch (Jim Gallagher, July 20, 2012) casts a light on becoming a landlord.
On the whole becoming a landlord has great appeal. Income generated from rental property could supplement or even support retirement. Besides the expanding inventory of available property, the downturn in the economy has forced a significant portion of the population to forego ownership and join the renter ranks.
Tightened mortgage standards mean fewer renters can buy homes, and the foreclosure mess is putting former homeowners into apartments. (reprinted in the Chicago Tribune http://articles.chicagotribune.com/2012-07-20/classified/sc-cons-0719-landlords-20120720_1_landlord-property-rent)
As with any golden opportunity, there is, potentially, a black cloud hanging on the horizon.
"The toilet's broken. The pipes are frozen. Every single holiday it's happened: Christmas, New Year's, Easter. They say, 'My AC is out, and it's the Fourth of July,' and you have to respond..."
The amount of work one must expect in being a landlord could be significant and for each piece of property owned and rented out the time factor increases exponentially. If a landlord is not a do-it-yourself type individual, one might want to rethink this form of investment.
Assuming one goes forward and the property is in place the next step is the ideal tenant, and ideal tenants' are difficult to find, and difficult to keep.
The critical element in selecting an "ideal tenant" is with tenant screening. And tenant screening can be a challenge to the new landlord.
There are three areas of review a landlord must consider prior to selecting a tenant:
1. A complete application.
When a prospective tenant fills out an application completely, without missing data or dates, one can have a reasonable expectation that the process will move forward in a positive manner. References from previous properties are especially important and should be included. Applications that are incomplete or have holes in data or information that cannot be easily explained should be warning signs to the new landlord.
When a new landlord shows off his rental investment there should be a continuous conversation with the potential tenant. Casual conversation littered with probing questions can often be insightful. One can get a sense of an individual with open communication.
3. Background check
Tenant background checks should be rigorous in the data and information collected. Criminal history, credit, evictions/bankruptcies/liens, and related reports often provide vital information any new or veteran landlord would need.
"Be very thorough in your tenant screening. Your headaches come from poor tenants and problem properties..."
Combined with a complete application, one which includes references, and a thorough interview, a tenant background check will greatly assist the new landlord in finding an ideal tenant.
A central consideration in selecting a potential tenant, is risk management or, perhaps, risk abatement. The biggest fear of any property owner that rents out their property is vacancy and one bad tenant can significantly impact a property. Not only can a bad tenant cause significant and costly property damage, they can frighten away or dissuade "ideal" candidates from renting a property. Further, the reputation of a given property could impact rental rates insomuch that a bad reputation from a bad tenant can drive down rental values.
Assuming a potential landlord has the fiscal ability to purchase a property, the wherewithal to handle the intricacies of renting property, especially in terms of common repairs and renters' unique demands, everything should go fine. Of course properties could lose value, the market could collapse, equity may not build over time, and cash value can become unstable...
One thing that should be easy for a new landlord, or any landlord, is the background check. TenantScreeningUSA.com provides a fast, efficient, user friendly environment for landlords to conduct any variety of background checks required. With a knowledgeable, friendly staff, TenantScreeningUSA.com can guide a new landlord through the intricacies of background screening. Take one less pressure of renting property away, contact TenantScreeningUSA.com