If you're able to invest some extra money in a property or have extra space in your existing home, you may be tempted to become a landlord. It may seem easy to earn a passive rental income.
However, if you're thinking about renting out your home or buying a new home, there are some important points to consider before taking the plunge.
Are you ready for the expenses?
The key to being a successful landlord is having a healthy balance between the amount of money you take in and the amount you spend. If this isn't the case, you'll make a loss on your properties.
Make sure you have a decent financial cushion in case something unexpected happens. Your property may sometimes be vacant and waiting for tenants, or it may require repairs.
Below are some typical landlord costs you should know about:
- Down payment: If you're investing in a rental property, you should expect to pay a large down payment.
- Insurance: When you rent out your home, your homeowners insurance may change as well. Your insurance will likely be more expensive for a rental property than for an owner-occupied property.
- Repairs and maintenance: If you're not a handyman, you should set aside some money to fix things like a broken door handle or electrical problems to keep your home in good shape. It's also wise to make a list of qualified handymen you can trust and afford.
- Vacancies: As mentioned earlier, it's likely that there will be times when your home is vacant or tenants don't pay their rent on time, which can affect your cash flow.
Are you ready to spend time to choose the right property?
You need to carefully consider what you want in a rental property. Do you want one that gives you good cash flow? Do you want something that requires less maintenance? Would you like this property to be close to your home? Consider whether you are prepared to do the extra work for it.
After choosing a property, you need to make sure that it meets all the relevant regulations, and it can be a "profitable" investment.
Are you ready to manage both people and your property?
Investing in rental properties is no easy task. Not only do you have to be a good landlord by taking care of the property and making sure all the bills are paid on time, but you also have to pay close attention to how your tenants treat your investment and how you treat your tenants.
A successful landlord is the one who makes a profit while keeping their tenants happy. Ask yourself if you're emotionally prepared to handle tenant relationships while taking care of the property.
Are you ready to spend time to choose the right tenant?
A good tenant can make or break your experience as a landlord, so make sure you thoroughly interview and vet potential tenants before offering them a lease.
A thorough review of employment contracts, income, bank statements, rental history, and other information is important to having a pleasant rental experience.
You can avoid a lot of hassle, money, and inconvenience—including eviction—by carefully vetting your prospective tenants before signing a lease.
Are you ready to educate yourself on rental laws?
As a landlord, you need to have a good understanding of local real estate and landlord-tenant laws as they relate to your property, your lease, and your tenants.
You should always learn and keep up to date on the latest laws. You can be held liable for injuries to your tenants, so you should have liability insurance and homeowners insurance. We recommend that you check with an insurance agent to know your options.
Other points to consider
Lack of money and lack of knowledge about real estate aren't the only problems a landlord can face. Time management is also a challenge. Many people decide to get out of the rental business because they cannot devote enough time and attention.
It's the landlord who gets the very first text message or phone call from the tenant when something goes wrong, no matter how late or early it is. That's why you should carefully consider the logistics of managing a property.
You'll also need to spend time marketing the property to potential tenants. There are many things you need to do, including taking photos, writing a listing description, showcasing the property on a platform, answering potential questions, updating your availability calendar, completing paperwork, etc.
How can Flatio help you get started as a landlord?
Does being a landlord seem like too much of a hassle? Don't worry. You aren't alone.
Many landlords who want to be in the rental business but feel that for some reason they're unable to handle the responsibilities of being a landlord, hire a property management company or a property manager to take care of the various aspects of their business.
You sit back and receive rent payments while a property manager takes care of tenant screening, background checks, credit checks, rental history, and manages security deposits.
However, hiring a property management manager can cost a lot of money, and it can be time consuming to find a competent one that you can fully trust.
Even if you find the right property manager, the quality of their services may not be as consistent as you'd like in the long run if the process isn't automated.
Is there a better solution? Of course there is!
Online rental platforms like Flatio were developed with all the issues facing landlords in mind. In fact, we're much more than a platform that helps you market your rental property and connect with tenants.
Thanks to our partnership with ICNEA, a property management solution provider, we serve as your property manager as well.
Flatio also strives to educate landlords about their rights and responsibilities and keep them up to date with informative content about applicable national and local laws.
Here's a look at some ways through which Flatio, a monthly rental platform, empowers landlords:
- The option to post a listing free of charge
- The freedom to set their own rent prices
- An efficient, easy, and quick rent collection process
- On-time rent payment transfers on Flatio’s part
- Digital solutions such as automatic recurring rent payments (for all rents), back-up data storage to provide landlords and tenants with a single source of reference (for all information and communications) and avoid potential conflicts between them, automatic reminders for rent payment, automatic notifications for overdue rents, the possibility to extend, terminate, or amend a lease agreement online, etc.
- The flexibility that comes with monthly stays, which allows them to make their property available when, and for as long as, they like
- The ability to choose to rent the entire property or just a private bedroom
- Access to Flatio's large pool of professional, high-paying tenants, including digital nomads, that offer them high occupancy and consistent income
- Access to a growing list of countries/markets where Flatio operates
- A tension-free relationship with neighbors thanks to the longer duration of the tenants’ stay
- Need for less investment of time, money, and energy in the rental business thanks to lower turnover rates compared to short-term stays
- Higher occupancy rates throughout the year, thus ensuring consistent income
- Direct communication and lease signing with tenants
- Integration with channel managers
- Calendar synchronization for their rentals
- The ability to manage different properties through a single digital platform
- An app available for both Android and iOS
- Lawyer-approved, localized lease agreements
- Lease agreements and website content translated into multiple languages
- Flatio offering updates about changes to national and local regulations concerning their rental business
- Informative content about their obligations and rights as a landlord
- Educational blog posts about relevant topics such as local rules or how to run a more successful rental business
- Detailed instructions on the website and in their dashboard about different aspects of the rental process
- Damage Coverage Guarantee for landlords who don’t require a deposit
- Customer support throughout the time their property is listed on Flatio, including customer support throughout the tenant's stay and accessibility to our direct emergency number on move-in and move-out days
- Flatio checking the credibility of Czech tenants
- The ability to see other landlords’ reviews of tenants
- Transparency of the entire rental process
- Different communication channels to interact with Flatio and tenants
- A reasonable commission fee (automatically deducted only as long as the landlord receives rent payments)
- The feature to add virtual tours of the property o Flatio being compliant with user privacy regulations and committed to not selling users’ personal information
