Due to the high cost of living, the rate of purchasing new homes has reduced. Statics reveal that only 60% of the population can afford to buy new real estate properties. Though the demand for such property is low, there seems not to be adequate houses to fulfil the needs of those who can afford to buy new homes.
This happens because the already existing homeowners choose to rent out their homes instead of selling them out. Landlords have realized that they can get instant cash flow from renting out their property. Becoming a DIY landlord is a smart move to supplement your income. DIY landlords now have an easy time due to the development of online rental platforms and technological tools.
This form of real estate investment can help you grow your wealth within a short period. It is a job that may come with challenges due to dealing with tenants and maintaining the property. The following suggestions can help you become a successful DIY landlord.
Avoid buying what you own
Purchasing a real estate property comes with so many costs such as inspection fees, closing costs, and agent fees which make it expensive. The process of closing the transaction is also tedious and time-consuming.
To avoid all this, consider renting out your current home before you start shopping around for another property to rent out. In this case, you can avoid the many finances that come with purchasing a new property such as commission fees and closing costs.
Apart from that, you already understand the condition of your home. You are conversant with the maintenance history of your home making it easy to manage it when you rent out. You can also budget easily for the areas that need maintenance better than a property manager running the new property.
The location of your home is crucial
Location is a critical aspect of real estate. As a landlord, one of your tasks is to try and attract tenants to your property. Renters get to choose property according to where it is located. By renting out your already existing home is a wise move since you already know everything about the area and neighbourhood. You also understand the market for the property well and can easily convince renters to settle in your property.
Your mortgage is more of an asset than a liability
Debt is only bad if it is not handled properly. In real estate, a mortgage is more of an asset than a liability. This is because, from the mortgage, you can create new income from the investment property by renting it out to some tenants. The rent you receive from them is extra income that you can use to pay off your mortgage.
DIY landlords have a lot of merits from renting out their already existing property. Every homeowner should take advantage of this opportunity to earn additional income from their property. You can treat your home as a small business and manage it yourself. If you know how to manage the property well, you can build a solid real estate portfolio.