With its monthly rental income and possibility of property value appreciation, the allure of owning a rental property may have you considering becoming a landlord. Research shows that over one-third of American households rent rather than own their homes, creating a significant and sustainable market for you to begin generating your wealth. If you think becoming an Orlando landlord might be right for you, use these tips to help get you started.
Do Your Research
The first step to becoming an Orlando landlord is to determine your investment criteria. When looking for a potential rental property, prioritize characteristics that are attractive to future tenants including location, proximity to schools, and the safety of the area. Some popular neighborhoods in Orlando include Park Lake, Thornton Park, and Downtown. You may consider buying a property in up-and-coming neighborhoods as well. Investing in these areas tends to be cheaper, but can be profitable long-term. Choosing properties with your future tenants in mind is a great way to help assess the value of the property and whether it’s worth investing in.
Crunch the Numbers
Once you’ve found a potential property, it’s time to run the numbers to ensure that it’ll be a profitable investment. To gauge if your property will have positive cash flow, calculate your expected rental income minus your upfront costs and ongoing expenses, including mortgage payments. The mortgage will often be your largest financial obligation. It might be worthwhile, particularly if you’re a first-time investor, to explore options that offer leniency in their interest rate, credit score, and down-payment requirements. One example of an attractive, low-cost financing option is a loan backed by the Federal Housing Administration. FHA loans allow you to obtain a mortgage without some of the more stringent requirements associated with conventional loans and can be used to finance multi-unit properties.
After you purchase a rental property, be prepared to encounter additional costs, including cleaning, maintenance, and even homeowner’s insurance to protect against the Florida elements. However, if you’re able to find a high-quality tenant, these costs will effectively pay for themselves.
Get Rent Ready
Now that you own a property, one of your responsibilities as a landlord is to maintain it. Before a tenant moves in, you’ll want to repair any existing damages and check that the plumbing, heating, and cooling systems are functioning properly. To help increase market value and allow you to price your property more competitively, consider making simple, cost-effective upgrades such as adding a fresh coat of paint to the walls or updating the light fixtures.
Manage the Property
Landlording takes a considerable amount of time and energy, but if it’s done properly, it will hugely contribute to your investment’s long-term growth and success. To become an excellent landlord and best protect your investment, consider taking the time to screen potential tenants. Finding the right tenants will make your job as a landlord much easier.
In addition, Orlando has landlord-tenant laws to help outline the rights each landlord and tenant have in relation to the property. A great landlord is well-versed in these laws and respects them to ensure they serve their tenants well. Complying with these laws is also in the best interest of your income investment.
Finally, while owning a rental property can be financially rewarding, it can be overwhelming as well. If you’re a new landlord, or just feel you need the extra guidance, you may look into hiring a property manager to help you better handle the day-to-day duties, including fielding tenant complaints, collecting rent, or even managing the tasks discussed previously.
Being an Orlando landlord comes with several responsibilities, but it can also be quite rewarding. Follow these tips and tricks to help you get started right in 2022.