Top 5 Tips for New Landlords
- Calculate ALL of your fixed costs to ensure that you can afford the property as a rental:
- Mortgage principal, interest (if applicable) and property taxes
- Monthly Association fees if applicable
- Ditto on water and/or sewer if not included in property taxes
- Property Insurance
- Cost of smoke/fire inspection which is required by each township on every tenant turnover
- Make friends with your accountant! He or she can be your best ally, identifying ways to save you money. Many items qualify as deductibles so they’ll guide you on what and what not to do, what records you’ll need to keep (think receipts, mileage, etc.)
- Form an LLC for each property to protect your other assets. See why this is important here
- Sign a lease with your tenant, making sure it meets the requirement of your state. NJ’s Truth In Lending can be found here
- Get the property in shape before tenants move in
- Replace or repair any appliances that don’t work
- Repair any dripping faucets, doors and drawers that don’t close properly
