(Note: we are not financial advisors– this blog is written for educational purposes only and should not be taken as personal financial advice)
In short, if you buy a house and then rent it out to other people who will then pay you money to stay there, that is one type of investment property. While there are many more types out there, today we will only focus on rental properties.
Rentals are a very popular way for people to make money instead of, or in addition to, investing in stocks and bonds. Rentals are reportedly some of the safer types of investing because people will always need a place to live. Not to mention, Idaho it is currently in a seller’s market and this is advantageous for property investors because there are a lot of people that need homes at this point in time. There are some things that you should be careful to remember for the safety of the tenant and yourself such as having a very firm contract agreement in place between you both. There should be detailed documentation and agreements to all necessary terms aka, you will want to have everything in writing. If the house is under your name, then you are responsible for any repairs and upkeep if there is something wrong which can be a bit problem, especially if you have a high turnover in tenants. In Idaho, usually people will rent a home for the minimum of two years so this is something that Idaho landlords have to keep an eye on.
Idaho and the Rental Market
A lot of people will rent homes when they are waiting for their custom home to be built and that is why they do not stay long and in fact they try to stay for less than two years in some cases. This means that you will want to be clear in your conditions for living there and if you will need them to stay longer to be honest about that from the start. There are a lot of places in Idaho that you can buy to rent out. There are townhomes, suburban homes, condos and homes in the city. These are all the most popular places to do rentals because these are the places that people want to live. It is close to work, school or the areas that they need. If you have a home in a good location that will up your chances of having tenants constantly. If you are hoping to keep tenants in the home you own and paying rent it is important to have a good reputation as well. A lot of the time, rentals of this sort are thanks to word of mouth. If you are slow to make repairs or you are not easy to access you can gain a fairly poor reputation. (Another tip is to keep up with the little things you can avoid some big problems down the road).
The house is under your name and you are responsible for any damages that happen to the house and you are the one that people go to with problems about the house. You can decide the colors of the walls, you decide the type of furnishings the home has and you could decide the furniture if you wanted. So, it is important to make good decisions that the general public would like. This is because there are going to be a lot of people that will come and see what your house, townhouse or condo looks like and if there are some crazy colored walls or cheap looking furnishings you will get fewer offers. It is good to know where to keep it simple and keep the cost low and when to spend a little more. Materials, for example, are something that you want to last a long time and the more durable the materials the longer they will last and keep a new look to them. You can buy paint for fairly cheap, so that is one area where you don’t have to break the bank. Now, if you are trying to create better relations with your tenants, you could instigate a compromise that allows them to paint the walls if you agree on the color.
Tips for being a good landlord
Being available to your tenants is also important for when they have questions or concerns about the property. If you are in open communication with the tenants then you will have a more successful relationship with the tenants and your experience will be more positive for the both of you. Communication is important and it is important to have all conversations documented. Try to communicate over email and text if you are able to. If you speak on the phone do not agree to anything without then getting the agreement in writing. There will be a lot of things that come up that you would not expect and it is important to protect yourself at all times. Clearly, you will have an agreement that if they are the ones that caused the damage they will have to take care of the repairs but some people are creative or have bad luck and you will need to be prepared to adapt and move forward in a fair way for the both of you. So, to be extra safe, you will need an attorney to help you create all of your contracts and you should consult them when things go awry. At the end of the day, you will just need to make the call so be sure to be wise in your decision making.
Investing in property is a great way to make extra money and build your investment portfolio. It can be a fun thing to do as well. You will meet a lot of people and hopefully make some good money in the process. You have a lot of control over the situation which a lot of people prefer, rather than having to invest in stocks and bonds. There is more active work that goes into investment properties because you have to be in contact with the tenant and help with upkeep on the house. Just remember to keep up with the smaller things to avoid them becoming bigger, have everything in writing and consult your attorney when you reach a gray area. Investing in properties can be fun and a great way to make money. Owning a home can be a very great move financially so renting as many homes as you can be very beneficial as far as making money goes. If you have a good reputation you can go very far with these investments.
REMEMBER- THIS IS FOR EDUCATIONAL PURPOSES ONLY AND SHOULD NEVER BE CONSIDERED AS PROFESSIONAL FINANCIAL ADVICE. SPEAK TO A PROFESSIONAL IF YOU WANT MORE INFORMATION FOR YOUR OWN SITUATION.