Michael Newman’s latest ‘e-Wealth Daily’ article is titled “This Lucrative Business Is Not Without Risks”. [Michael Newman’s Article]


Michael Newman’s latest ‘e-Wealth Daily’ article:

This Lucrative Business Is Not Without Risks

With housing prices relatively stagnant, many looking for a new business opportunity are setting their sights on real estate. The name of the game this time around, however, is not
flipping; instead, the focus is more long-term. These days, entrepreneurs are more interested in picking up properties solely for the purpose of renting to tenants. In other words: becoming landlords.

A friend of mine recently purchased his third property for the sole purpose of using it as a rental home. He is a businessman, but also a landlord for three homes. As far as he’s concerned,
the rates were right to make the buys and the income opportunity outweighed the work he’ll have to do on the homes. He hopes that he ends up making cash on the homes, so
when he decided to sell in the future, he’ll have a nice payout to retire on.

Each of the homes he’s purchased is in good shape, so renters have been able to move in instantly. So far, he hasn’t really had to put any work or money into them.

Of course, as I can say from experience, there are a number of costs a landlord incurs to operate a home. If you’re considering the idea of making some extra cash as a landlord, here are some of the costs you should be prepared for.

The first thing you should be aware of is that your insurance may be slightly higher if you’re buying with the intention of renting. Now, that being said, you can factor that additional
cost into the amount of rent you charge on the home. But if the number sounds a little high at first, it’s normal. Insurers feel there is more risk associated with a home that will be occupied
by renters.

You’ll be spending on maintenance, upkeep, property taxes and basically any other expense that pops up once you own the home. Remember, just because you don’t live in it doesn’t mean
you’re not 100% responsible for it. You are. Now, it’s unlikely you’ll have to deal with problems monthly, but you should count on a project or maintenance cost at least a couple of
times a year. Try to offset your out-of-pocket expenses by factoring a portion of the monthly rent for these costs.

You’re also going to have to cover various administrative costs. You’ll have to talk to a lawyer about the contract you draft and to learn your rights. Also, you’ll have to pay to conduct credit
checks on tenants, and a number of other little costs associated with finding the best tenants. At the end of the day, this is just an operating cost for your business.

There’s money to be made as a landlord, but it does take some work. Put the work in when needed so you don’t lose out in the long run!

e-Wealth Daily

About e-Wealth Daily

The e-Wealth Daily Bulletin brings you daily tips, advice and breaking news related to home businesses, small businesses and internet marketing. Our team of experts gives you the information you need to take your business pursuits to the most profitable level. Founded by Adrian Newman in 2003, the e-Wealth Daily Bulletin and www.ewealthdaily.com are a division of Lombardi Publishing with online newsletters reaching over 100,000 subscribers each month.

* IMNewsWatch would like to thank e-Wealth Daily for granting permission to reprint this article.

Sharing is caring