Tuesday, 8 May 2012

Buying a house to rent?

                                                                                                                                 
If planning to buy a house then rent it out to tenants you must know that it comes with a fair share of risks and complications. Foremost to consider is the location of the house you are buying and the kind of tenants you intend to have. Many prefer families rather than students who may not readily pay up the rent; while this is reasonable, you need to realize that a tenant with a family will incur high maintenance costs of the house as compared to students.

  Many landlords face problems with tenants when it comes to rent payment, so you need to have a contingency stash for the mortgage repayments lest the bank repossess the house and for regular repair of the house. Compare the mortgage repayment and the expected rental prices to see whether you will break even and make profit. The rent should however be ideally enough to pay the monthly mortgage to the bank.

You need a lease agreement which stipulates the terms that govern the owner of the house and the tenant relevant to the asset under lease. The lease should cover important points that may form part of a conflict between the parties during the lease period.

You should by now prepare the house for renting. Get it cleaned, repainted, fixtures repaired and all safety hazards corrected.
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