One Step Realty, Inc - Are you ready to be a landlord?

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Are you ready to be a landlord?

Free consultation to determine your potential monthly rental income!

Are you stuck with a home?

Given the current state of the economy and the housing market, we know that right now it is difficult to sell a house. Many homeowners also owe more money on their house than the house is worth, making it almost impossible to sell the house because of the large sum of money required at closing. This leaves these homeowners feeling frustrated because they cannot sell the house, and the mortgage payment is still due every month.

What are the benefits of becoming a landlord?

The greatest benefit to becoming a landlord is incoming cash flow to pay the mortgage. Many homeowners can at least break even, or they may lose a little money each month in the worst case scenario. If you are a homeowner, and your mortgage payment on your empty house is $850 per month, then you are paying the full mortgage payment plus all of the utilities to keep the house in proper condition, and you are not getting any use of the property. If you let One Step Realty, Inc. find a tenant for your property, and you net $750 per month in rent after property management fees, now you are only paying $100 per month to own the home, and none of the utilities! This is where One Step Realty, Inc. property management services shine: For example, using the scenario above, you could pay $850 per month on an empty house, or you could take the risk, get a tenant, and pay only $100 per month!

Another benefit of being a landlord is the potential for tax savings. If you take our last homeowner scenario, over the course of a year, they will be around a $1200 deficit on the property between the rent and mortgage payment alone. Then you can check with your tax advisor, and possibly add in mortgage interest, repairs, and other deductions against the rental income. Any loss you take on the property could be used as a deduction against your total income - which results in a potential tax benefit for you during tax season!

What are the drawbacks of becoming a landlord?

While One Step Realty, Inc. works hard to minimize issues with rental property and tenants, we cannot guarantee that everything will go as smoothly as we wish. Given the state of the economy, sometimes finding tenants can be difficult, and may take some time. While there are benefits to being a landlord, always remember that "life happens". Tenants can get divorced, lose jobs, get sued, etc. Events like these can impact your tenants paying their rent on time, or at all. With the unemployment rate at the highest rate in decades, people are losing their jobs and the resulting stress makes it difficult to find a perfect tenant. In times like these, One Step Realty, Inc. will work with you to determine the best course of action.

Remember that you are still the owner of the property, which means ultimately you are responsible for the mortgage payment and any repairs necessary, just as if you lived in the property yourself. If the roof needs to be repaired, or the heat goes out, you will be responsible for paying for the repairs. Fortunately, you may be able to write off these repairs for taxes, but you will still pay for them up front. Also remember that as a landlord, you will be required to carry rental property insurance, which is relatively cheap, and will protect you against liability lawsuits and may also help with any major repairs resulting from tenant damage.

Before becoming a landlord, you may want to ask yourself...

  • Can I handle a slow-paying tenant? Is it better to get some money per month rather than none at all?

    While One Step Realty, Inc. will do everything we can to collect your rent on time, sometimes even the best tenants run into cash-flow issues, and need to pay later. For many landlords, a slow-paying tenant that takes care of the property is better than an empty property or non-paying tenant.

  • Can I afford to pay to evict a tenant should the need arise?

    As the property owner, you are responsible for legal fees associated with eviction. One Step Realty, Inc. works hard to properly review tenants, but should the need to evict a tenant arise, we will work with you to minimize costs.

  • Can I afford any necessary repairs that may arise?

    Properties require maintenance from time to time. Leaky roofs, broken water heaters, and clogged plumbing happens, and will need to be repaired at your cost. One Step Realty, Inc. can provide the contractor, or you can choose your own licensed contractor to perform any necessary repairs. If a high-cost repair is needed, One Step Realty, Inc. will request your approval before any work begins.

  • Am I able to make the mortgage payment if my tenants are unable to pay?

    Remember that even with tenants, you are ultimately responsible for the mortgage payment. As a landlord, your property cannot go into foreclosure while you have tenants in the property.

Free consultation to determine your potential monthly rental income!
One Step Realty, Inc. 6095 28th Street SE Grand Rapids, MI 49546