Property Investing in The 21st Century

Investment Property Made Easy

If you’ve decided to invest in property, renting it out is a great way to ensure that the property is paying for itself. And, if you’ve made a great investment, chances are there will be some income on top of that monthly mortgage payment.

When you own an investment property that has a mortgage payment, you want to be sure that you aren’t going to be left in the cold with tenants who don’t pay on time. You’ll also want to be prepared in case the unit is vacant for a while so it’s important to:

1. Have several months of mortgage payments set aside and
2. Find the right tenants

Saving some money for emergencies such as repairs and covering payments if the property remains vacant for some time is part of good financial planning but:

How do you find the right tenants?

* Have prospective renters fill out an application
* Do an interview and get to know the tenants
* Do a credit check
* Look at debt ratio of the tenant to see if paying on time might be a problem
* Check references
* Ask for a deposit (check local laws about requirement)
* Sign a lease that clearly outlines roles and responsibilities in keeping the property in good condition and other matters related to the property
* Be a good landlord and chances are, the tenants will be better tenants

Be a good landlord

Being a good landlord can facilitate a great relationship with tenants.

Once your unit is rented, do regular inspections (within legal requirements for that area) to see that the property is well cared for and if possible be on friendly terms with the tenants. Make repairs promptly and consider incenting the tenants to keep the property in good shape by offering to pay for paint, wallpaper and reimbursing them for improvements done. Having a good relationship with their landlord will increase the possibility of keeping them there long term. Being approachable about potential problems will work in your favour as well. Problems can happen but if a tenant likes you, they’ll notify you of issues such as financial problems or giving plenty of notice before they vacate. Investments always have a certain element of risk but careful planning will minimise the risk of financial loss.

Written by Clint Maher - 21st Century Academy
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