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Four Things You Need to Understand Before You Rent out Property

Four Things You Need to Understand Before You Rent out Property

Whether you’re renting out a room in your apartment or purchasing a new property to generate rental income, there’s a bit of planning involved. Most people rent property for one reason — to make money. Whether you’re simply trying to reduce the burden of your basic living expenses or working toward financial independence, the process is basically the same. As long as you understand these four important concepts, anyone can learn to become a landlord.

1. The Rental Values in Your Area

Most people tend to overvalue their property a little bit. After all, it’s your home, and you’ve either spent a lot of time and money maintaining it, or at least a lot of time picking out the perfect investment property. We all want to maximize our return on these investments, but this will be challenging if your property is not priced appropriately. Do some research on local classified sites and see what comparable properties are renting for. Account for things like size, location, and upkeep. If you need help, you can follow a guide to pricing your rental.

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2. Your Tax Obligations

Don’t forget that you’ll be responsible to pay more than just the mortgage. You’ll need to pay income tax on the rental income you generate, and you’ll also be responsible for property tax on the real estate you own. These taxes can seem frustrating, but remember that this is how the city pays for its infrastructure. Spend some time so that you understand how property taxes work. This will help you maintain a clear idea of what your financial obligations are.

3. Your Net Operating Income

How much money do you actually have coming in every month? This is a question you’ll need to be able to answer in order to make positive business decisions. To put it simply, NOI is essentially all of the money you’ve collected in rental revenue, minus all of the direct operating expenses that were incurred in generating the income. Examples of operating expenses would be management fees, maintenance expenses, and property taxes.

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This is an important figure to have in mind because it is used by real estate investors all over the country. If you’re purchasing an investment property from someone, or even planning on selling your property in the future, NOI will be one of the most important figures used in determining profitability. This can seem a bit complicated at first, but after doing a quick Google search, you’ll see it is often explained in much more detail on a number of property management blogs.

4. Tenants’ Rights in Your Area

Every state has slightly different rules about what is or is not allowed. Some states don’t allow you to charge a damage deposit at all, while others have a limit on how much of a damage deposit is required. If you were planning on renting out a freshly renovated home, or a fully furnished apartment, you might not want to do so without a little bit of collateral that can help protect your investment. Even if you only charge half a month’s rent as a damage deposit, the incentive of getting that money back is enough to help keep most tenants mindful of caring for your home.

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Another important aspect of tenants’ rights are the factors that would allow a tenant to break or terminate a lease. If you live in a state that allows tenants to come and go with relatively little notice, you’ll want a property that is easy for you to rent out. Meanwhile, if you live in a state that requires tenants to give reasonable notice, you’ll have time to find a new tenant if your current one decides to leave.

Featured photo credit: pixabay.com via pixabay.com

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Josh MacDonald

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Published on January 28, 2020

How to Ace an Interview: Nailing the 10 Most Tricky Questions

How to Ace an Interview: Nailing the 10 Most Tricky Questions

As someone who has been in recruiting for over 10 years I can tell you the interview is vitally important to getting that new job you really want. During the interview process, there will most likely be at least 2 interviews, a phone interview and an in person interview. Both are important.

Companies can of course have different interviewing processes but in general, there is at least one phone interview, also known as a phone screen, and a live, in-person interview. The in-person interview can be with one person or it might be with a variety of people. While they are both important, the live interview is typically the one that will make or break you as a candidate for the position you are interviewing for.

Many of the interview questions we will review here will more likely come up during the live interview. But it’s a good idea to be prepared for them on the phone interview as well.

To illustrate how important the live interview is, I’ll tell you about my search that happened a year ago. I’d decided it was time to move on from the role I’d been in for a little over 6 years. As I started researching and looking for a new opportunity, I began down the path with 2 companies. With the one I landed with, I’d had 3 separate phone screens, each one an hour long. They must have thought they went well because I was asked to fly to the city where the corporate office is at and do an in-person interview. — with 8 people.

Yeah, it was a long day. The good news is I rocked the interviews across the board. I flew home that evening and the following day, I received a call with the job offer. That was less than 24 hours after I’d had the in person interview. This is how important the live interview is.

So how to ace an interview? We can dive right in to helping you nail the 10 most tricky interview questions:

1. What’s Your Biggest Weakness?

This is a personal favorite of mine. The primary reason for this question is not to actually find out what your biggest weakness is. Unless of course, you say something like “showing up to work on a regular basis,” then it’s probably going to get you kicked out of consideration for the role.

The main reason for someone asking you this question is to see if you are self-aware. That is if you know your weaknesses and are smart enough to account for them.

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The smart play here is to answer in a modest way. You want to be able to show that your biggest weakness actually has an upside. For instance, I usually say that mine is impatience. Which is true, I like to get things done. But what I ensure what I point out is that even though I am impatient, it’s because I like to crank and get a lot of work done.

2. Why Do You Want to Work Here?

Interestingly enough, a lot of people don’t have an answer to this question. It’s designed to find out if you’ve actually done research on the company and if you are excited about this position.

When I ask this question, many people have told me something like “because it looks like a good opportunity”. I mean, can you be any more generic?

The key to answering this is to show you’ve done research on the company and that you are enthusiastic about the actual position. Companies want people that are excited to work there, not just someone that shows up for a paycheck.

3. Where Do You See Yourself in 5 Years?

Employers are asking you this question to see if you have somewhat of a plan for your career. It doesn’t have to be completely mapped out in a step by step manner but, a general overall plan is good to see. It means you are goal oriented and are working towards something.

Don’t worry about answering in a way that states you are planning on sticking with the company until you retire. Rather, focus more on how it’s important to you to continue to learn and get better and better at what you do. Companies like to hire self-motivated people.

4. Tell Me About a Time You Messed Up

Or tell me about a time something didn’t work out the way you planned. Similar in concept. The key here is to show that you take accountability for your actions and how you react to things going wrong.

Companies like to see that you are willing to accept responsibility for the things you oversee and own up when you are wrong. People that always find a way to blame their missteps on other people or circumstances typically don’t make good team mates.

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The other component here is things don’t always go as planned, how good are you at adapting and thinking on your feet.

5. Why Are You Looking to Leave Your Current Job?

This may seem like a place to launch into all the things you don’t like about your current job. Or to talk about what a terrible person your boss is. Don’t do it. That’s the path you do not want to go down. And that’s really what this question tends to prod out of many people.

If I am interviewing you and ask this question and you tell me all the ways your boss doesn’t appreciate you and your company has terrible leadership, I’m thinking what you’re going to be saying about me in a year when you are interviewing somewhere else.

Make sure you are framing your answer in a way that doesn’t shed bad light on your current or most recent employer. You want to focus on things like you’ve enjoyed working for the company but your growth options are limited there so you are exploring outside opportunities.

6. How Would Your Current Manager Describe You?

This question gives you the opportunity to show off your strengths and what your boss appreciates about what you bring to the table. You want to focus on the positive traits that your boss likes and how it helps you in your role.

What you do not want to do is sprinkle in the things your boss doesn’t think as highly of. Don’t say something like my boss would describe me as a focused worker, at least on the days I make it into the office.

7. Tell Me About a Time You Overcame an Obstacle

Another one of my favorite questions. Interviewers ask this question to see if you are able to deal with roadblocks.

Things don’t always go smoothly, so having people on the team who are able to solve problems has huge upside.

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Being able to overcome obstacles is a great trait to have. Make sure you have a few stories about how something didn’t go as planned that caused a challenge and how you were involved in solving the problem. It’s a way of turning a bad situation into a good one.

8. Why Should We Hire You?

If you are at the point of a live interview, you should be highly interested in the position.

By this point, you should have a pretty clear picture of what the role is and how your skills and experience will help you succeed. The reason this question is being asked is to see if you are the right candidate for this role.

This gives you a great opportunity to tell your interviewer how your expertise will positively impact the role. Right now, you are in the spotlight to clearly show that your experience is the perfect fit for the position and why. Shine on!

9. What’s Your Greatest Achievement?

Employers tend to ask this question to gain an understanding of what your big wins were. What are the really impactful things that have happened during your career and how you were the reason why they happened.

This is another great opportunity for you to toot your own horn. What you want to be conscious of is how you tell the story about your biggest achievement. You want to make sure you say why it was such a big achievement.

If possible, it’s always good to include your team as part of the big win. Employers love to hire people who can make things happen but, it’s also important they understand the importance of team work.

10. Do You Have Any Questions for Me?

You might be asking yourself why this is a tricky question. Honestly, it’s not a tricky question if you are prepared for it.

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What the interviewer is looking for here is how interested and excited you are for the position. You’d be surprised at how many people answer this question with a blank stare or have no questions prepared.

Again, if you are at a live interview, you should be highly interested in a position and the company. You will convey how interested you are in the opportunity with some well thought out questions to ask.

You don’t want to just ask one question like “How often is payday”? Have at least 4 to 5 questions prepared but don’t overwhelm your interviewer with dozens and dozens of questions. Show that you’ve given some serious thought to this position by coming prepared with solid questions to ask.

The Bottom Line

There you go, insight to nailing the 10 most tricky questions during the interview process. There are, of course, many other questions you might get asked during the interview process but, these tend to be the ones that trip most people up.

Remember to take your time and thoroughly prepare for the interview. You don’t have to memorize your answers or anything but having a good idea of how you’d answer these questions will help you ace the next interview.

Here’s to being career advancement ready!

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Featured photo credit: Romain V via unsplash.com

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