The Essentials for Success as a Landlord Part 2

The last time we went over some of the absolute essentials for success as a landlord but some of my friends complained that they were too obvious. Which led me to say, well, being a landlord isn't "hard." It just takes careful planning, which is crucial to your success. So this time let's go over the planning necessary.

Have a plan: Do not be afraid to think of every possible scenario. Make a list of all your expenses. This includes mortgage payments, insurance, taxes, utilities (water & garbage, not electricity and phone). Go over it again and again. Make sure you know a year in advance everything you will pay for and then break it down monthly. If you are going to be making a profit, know how much. If you have a negative cashflow, be aware of that. Do not do anything, repeat, ANYTHING without knowing the numbers.

Stick with the plan: Sticking with the plan is just as important as having one. If you constantly change your mind, real estate investing is not for you. If your plans change, think about them more than once and then make a decision. Remember, real estate cycles are about seven years. If you cannot think forward about where you or your life will be for the next 7 - 10 years, real estate is probably not for you.

Stay local: Prices and real estate varies by neighborhoods, cities, states. Know your area. Or find someone who does. Then, you'll be able to spot the deals as soon as they are on the market.

Get adequate insurance: Very important. If you have lived in the home before you rent it out, you must change your insurance to be landlord's insurance. A lot of the times, this does not make a huge difference in the payments, but it does protect you in case of renters' damage to the home. A homeowner's policy will not cover renter's neglect, or worse, a casualty caused by the renter's dog.

Fix everything that needs to be fixed before advertising property: This is by far the biggest mistake. Renters will not rent a place if the fence is broken. Do fix everything that is broken before you start talking to neighbors or putting ads in the newspaper. It does not create a positive image in the potential tenant to meet a landlord unwilling to fix broken things.

Keep these essentials in mind and most everything else will take care of itself! Good luck!