Are you considering becoming a landlord to make some extra money?
Owning real estate is a great long-term investment strategy.
In fact, at Mitten Made Properties, that’s what we do! We buy Metro Detroit properties, fix them up, and either flip them or rent them out to tenants.
So we thought we’d share a few tips from our own toolbox of real estate investment strategies for those of you who are looking to become a landlord and build passive income.
Here you go!
Do the Math
Before you become a landlord, it’s important to calculate how much you stand to make per month from the rental property. How much is the monthly mortgage payment? How much should be set aside every month for maintenance and repairs? Subtract those numbers from the rental amount to figure out how much profit you’ll make every month.
Get Insurance
It’s important for landlords to have insurance on the properties that they own, which typically includes property and liability coverage. You need to keep your yourself, your tenants, and your investment protected.
Find Tenants
Tell friends and family about your new rental, put a sign in the yard, and maybe even pay for some advertisements in the local newspaper. Listing your rental on Facebook Marketplace and Nextdoor are online options that are typically free. The more marketing you do, the faster you’re going to find high-quality tenants. And make sure to ask potential tenants for references and rental history. It’s also wise to run credit and background checks before signing any papers! You’ll have to pay a nominal fee for these – around $25 – but it could save you from significant losses down the road.
Maintain the Property
It’s your job as the landlord to maintain the property. So make sure you have some money saved up for both routine maintenance and unexpected repairs. Check in with your tenants regularly to make sure things in the house are working as expected. You’ll want them to report issues early before they get out of control and more expensive to fix. A small water stain on the ceiling can snowball from a simple roof patch to extensive structural damage and mold if left unchecked.
Hopefully that gives you an idea of what it takes to rent out a property! With the right combination of attention, maintenance, and conscientious tenants, being a landlord can be an efficient way to earn extra income.
If renting your Southeast Michigan house out yourself sounds like too much, give Mitten Made Properties a call at (248) 883-3340. We can buy it as-is for cash, close in as little as two weeks, and even pay all closing costs!