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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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Last Updated on August 10, 2020

10 Things You Should Do If You’re Unemployed

10 Things You Should Do If You’re Unemployed

Regardless of your background, times today are tough. While uneven economies around the world have made it incredibly difficult for many people to find work, the recent COVID pandemic has made things worse.

Regardless of age and qualification, stretches of unemployment have affected us all in recent years. While we might not be able to control being unemployed, we can control how we react to it.

Despite difficult conditions, there are many ways to grow and stay hopeful. Whether you’re looking for work, or just taking a breather between assignments, these 10 endeavors will keep you busy and productive. Plus, some may even help push your resume to the top of the next pile.

Here’re 10 things you should do when you’re unemployed:

1. Keep a Schedule

It’s fine to take a few days after you’re finished at work to relax, but try not to get too comfortable.

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As welcoming as permanently moving into your sweatpants may seem, keeping a schedule is one way to stay productive and focused. While unemployed, if you continue to start your day early, you are more likely to get more done. Also, keeping up with day to day tasks makes you less likely to grow depressed or inactive.

2. Join a Temp Agency

One of the easiest ways to bridge the gap between jobs is to find temporary work, or work with a temp agency. While many unemployed people job hunt religiously, rememberer to include temp agencies in the search.

While not a permanent solution, you will be in a better position financially while you search for something permanent.

3. Work Online

Another great option if you’re unemployed is online work. Many different sites offer a variety of ways to make money online, but make sure the site you’re working for is reputable.

Micro job sites such as Fiverr and Upwork as well as sites that pay for you to take surveys, are all quick, legitimate options. While these sites sometimes offer lower pay, it’s always better to move forward slowly than not at all.

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Here’s How to Find and Land a Legit Online Work from Home Job.

4. Get Organized

Unemployment is an excellent opportunity to get organized. Embark on some spring cleaning, go through old boxes, and get rid of the things you don’t need. Streamlining your life will help you dive head first into the next chapter, plus it helps you feel like your unemployed time is spent productively.

Try these tips: How to Organize Your Life: 10 Habits of Really Organized People

5. Exercise

Much like organizing your life, another good way to keep yourself enthusiastic and healthy is to exercise. It doesn’t take much to get slightly more active, and exercise can help you stay positive. Even a walk around the block a few times a week can do a lot for keeping you motivated and determined. If you take care of yourself, you can make the most of this extra time.

6. Volunteer

Volunteering is an excellent way to use extra time when you’re unemployed. Additionally, if you volunteer in an area related to your job qualifications, you can often include the experience on your resume.

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Not only that, doing good is a true mood booster and is sure to help you stay optimistic while looking for your next job.

7. Improve Your Skills

Looking for ways to increase your job skills while unemployed is a good way to move forward as well. Look for certifications or training you could take, especially those offered for free.

You can qualify more for even entry level positions with extra training in your line of work, and many cities or states offer job skills training. Refreshing your resume, and interview and job skills may make your job hunt easier.

8. Treat Yourself

Unemployment can be trying and tiring, so don’t forget to treat yourself occasionally. Take a reasonable amount of time off from your weekly job hunt to recharge and rest up. Letting yourself rest will maximize your productivity during the hours you job search.

Even if you don’t have extra money for entertainment, a walk or visit to the park can do wonders to help you go back and attack your job hunt.

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9. See What You Can Sell

Another good way to bridge the gap between jobs is to sell unused possessions. eBay and Amazon are both secure sites, but traditional garage sales are a fine option too. Sell off a few video games, or some electronics, for some quick and easy cash while you figure out a permanent solution.

10. Take a Course

Much like training and certifications, taking a class can be a good way to keep yourself sharp while unemployed. Especially when you’re between jobs, it can be easy to forget this option, as most courses cost money. Don’t forget the mass of free educational tools online: 25 Killer Sites For Free Online Education

Keeping your brain sharp can help you stay focused and may even help you learn some new, relevant job skills.

The Bottom Line

While unemployment numbers are still high, there are many things you can do to better yourself and move forward. While new skills to aid your job hung might seem out of reach, there are plenty of free ways to get ahead, online and off.

Additionally, don’t forget that taking time for yourself can do wonders for keeping you productive in your job hunt. While it is a challenge, don’t give up–being unemployed can offer you extra time to better yourself, and possibly grow more qualified to find work.

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Featured photo credit: neONBRAND via unsplash.com

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