How to Protect Your Property as a First Time Landlord?

Published on: 24 November 2018 Last Updated on: 13 December 2021

No matter what route you take to the rental market, you’re making an exciting step in life. Many people believe that becoming a landlord is fail-proof. However, although the process can be both financially and mentally rewarding, there are downsides and potential pitfalls. Renting out a second property is ideally an investment and, as such, several risks come with it. As a result, you need to protect your investment and mitigate against risk. Here’s how you can do just that to make sure that you are getting returns for your investment.

1. Take Out Insurance Being The Landlord:

Traditional insurance doesn’t usually cover rental properties. As a result, you should take out specialist landlord insurance. As well as protecting your home in the same way traditional home insurance would, landlord insurance can protect you against other problems, such as unpaid rent or a tenant injuring themselves at your property. Get a company that offers the best insurance deals to landlords and insure your property with them.

2. Draw Up the Correct Contract:

The correct tenancy agreement can help you in case you need to evict a tenant or take action against them. The vast majority of rental agreements come to an amicable end, but there may be times when you need to evict your tenant. A correct tenancy agreement will provide you with the framework to issue either a Section 21 notice (giving them two months’ notice) or a Section 8 notice, which allows the person to seek possession under particular grounds such as rent regions and anti-social behaviour (more information on both of these notices can be found here). Make sure that the tenancy agreement that you craft will protect you under all circumstances.

3. Take A Security Deposit:

Taking a security deposit or a damage deposit (usually a month’s rent) allows you to protect you and your property against any breakages or damages. It is important to put these measures in place if you want to be sure that you are on the safe side.

You must place the deposit in a concern that is regulated by a government deposit scheme, such as the Deposit Protection Service, MyDeposits or the Tenancy Deposit Scheme. The deposit is then returned to the tenant at the end of the tenancy unless they fail to meet the terms of a tenancy agreement, cause damage to the property or fail to pay rent and bills.

4. Ensure There’s an Inventory:

Before your tenant moves in, you should complete an inventory of everything currently in the property. As well as listing everything currently in the property, you should also list its current state, including any dents, scratches or stains.

Once this is complete, you should have a walk around the property with the tenant. Then you can both confirm everything listed is present and the condition described is accurate. When this process has been completed, you should both sign and date the inventory.

5. Have a Financial Buffer:

Finally, you should ensure you have a financial buffer, in case you have to pay for running repairs. The costs for running a rental property can quickly stack up. Although you could take out an installment loan to finance any major payments, it’s advisable to have a pot of savings before you begin, in case you need to finance any running repairs.

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Major financial problems that can affect a new business

For a new business just fresh out of the concept stage, there’s a lot of excitement ahead. However, there are often troubles on the horizon, and these tend to revolve around money issues. Finance streams may be in place when the business is first created, for example, but they can quickly dry up as time goes on. It’s expensive to hire staff, and this can often push a firm well into the problem zone. Here are some ways that new businesses can get around these problems. No finance streams : When a new business first launches, it’s usually the case that there’s some form of finance behind it – at least for a short time. The entrepreneur themselves might be financing it from savings, for example, while there may also be an investor. The long-term plan is usually to have incoming cash replace this stream once it dries out – but revenues and profits don’t come overnight, and in fact, they often don’t materialize for a long time. Instead of relying on external finance providers, it often makes sense for a new business to be “bootstrapped”. Bootstrapping essentially means cutting down costs until you reach a stage where you have the funds to raise them back up. Instead of hiring an office space, for example, why not knuckle down and work hard in your spare room until you have enough – or almost enough – sustainable income to pay for a desk somewhere? It may be tough doing this sort of thing at first, but it could be the difference between business survival and failure. Staffing costs : In a bygone age of manufacturing and industry, the main cost that businesses faced was equipment. This also tended to be where companies made cutbacks when times were hard, either by downsizing their factories, leasing out their equipment or something similar. However, for many modern American businesses, the main cost is staff. Staff members are, in general, expensive. Some, such as coders and executives, command high salaries that can quickly drain a firm’s budget. Even when a person is hired on a lower salary, there are plenty of extra considerations to take into account, which can make the hire expensive: from the additional insurance premium that a firm might need to pay on their office space to the additional computer and desk space that the staff member might need, the costs can mount up. It makes sense for many firms to hire contractors instead of as they come with far fewer financial responsibilities for the firm – and the arrangement gives both parties the flexibility to move on if needed. With umbrella companies available to manage the tax side of contractor pay, there’s no need to worry about the effect that it might have on your HR or accounting departments either. Running a new business is exhilarating in some ways, but it also comes with its problems. Finance is almost always the big one – and from large staffing costs to dried-up finance streams, there’s a lot that can go wrong. However, by focusing on finance methods such as bootstrapping and choosing contractors instead of employed workers, there are ways that you can get that profit and loss sheet under control and move towards a more sustainable financial future for your business. Read Also : Invest In A New Car, Without A Financial Liability Debunking 7 Notorious Bankruptcy Myths

Title Loan Requirements: What you Do and Don’t Need

A title loan is a type of a loan where an asset is given to act as collateral, popularized because of two main reasons: When determining your qualifications, title loans don’t put your credit rating into consideration. Title loans get approved very quickly for loan amounts of as little as $ 100. This makes title loans some of the most convenient and efficient options in the lending market. The Breakdown of A Title Loan : A car title loan is the most common type of title loan. It’s a case where you as a potential borrower, you are obliged to be in possession of car outright and sign the title over to an auto loan title company. The loan company will allow you up to 25% of the value of the car to the borrower and then retain the car’s title as collateral in case you breach the repayment agreement. It’s worth noting that the amount you want to borrow must always be put into consideration. The value of your car or the commonly called – equity in the value will set the limit of the amount of money you can borrow. If your car has a high value, so will be your title loan. The lenders will in most cases lend you money they are sure they can get it back easily if they were to sell your car in case you default the payment. With car title loans, there are no prepayment penalties, so it’s okay and not costly if you want to pay off your loan earlier. Be Careful of Rolling Over : A lot of title loan cases end up in rolling over. This means that you decide to prolong your payment by another 30-day loan. The disadvantage of rolling over with your title loan is that it gets very expensive and every time you extend the loan you are penalized for new loan fees. There are cases where the process of extending a car title loan is controlled by the law. Unlike the interest rates that you usually pay on credit cards, title loans have a very high cost despite the fact that there are laws that limit the interest rates. You, therefore, end up paying back more money than you actually borrowed. The Risk of Losing Your Car : Getting a car title loan sounds so good but there is always a big problem which is the risk of losing your car to your lenders. This happens in the event that you can’t pay back your lender. Your car will then become their possession and they sell it to get back their share of the money that they lend to you. Car title loans are different from bank loans, typically they have easier requirements. Here are the key dos and don’ts you need to know to apply for a title loan. What You Do Need To Apply FOR A Title Loan : You will need the following before going for a title loan: Vehicle title with your name Valid driver’s license Proof income Proof of residence These requirements will be qualified in the following manner: Vehicle Title with Your Name : Since the title loan is being given to you, the title of your car must be in your name, and lien-free or something close to lien free. What’s a lien-free car title? It simply means that you have total ownership of the car; it’s completely paid off with no outstanding balances or loans against it. Certifying that your vehicle is lien-free is important because the amount of money you are given on the loan is on the basis of the value of your vehicle at the time of application. A Valid Driver’s License : For proper verification of your identity, your valid driver’s license is required. In addition, the names on the form of identification must match the name on the title of the vehicle in order to issue the loan. Proof of Income : The companies that give you loans don’t necessarily depend solely on credit scores. Rather, you will be asked to show your proof of income like: Paystubs Bank statements Monthly allowances such as retirement accounts With proof of income, you basically tell the lender how much you can afford to pay back. Proof of Residence : Since title loans aren’t given to every region, you just have to prove your current residence and also certify that you have been an ongoing resident of your current residential area for the past two years. This same requirement is still used to verify your identity. What You Don’t Need To Apply For the Loan : There are so many misconceptions about what you need to apply for a title loan. Mostly, you might think that you need: A good credit score A bank account A high-paying job However, contrary to popular belief, none of these requirements are essential anywhere when applying for a title loan. A Good Credit Score : You don’t need a perfect credit score for you to get a title loan. A good credit score doesn’t necessarily prove your eligibility for a loan. A Bank Account : Are you worried that you don’t have a bank account? You don’t need to be. You will be provided with a check for your loan amount without having to give your account number from you. A High-paying Job : This is one of the most popular misconceptions that is among many people. There are flexible payment options for a realistic repayment schedule and the amount you’ll feel comfortable accepting. With the right kind of documents, you can easily get a title loan. You do not need to have a high-paying job, a good credit score nor even a bank account. All you need is a clean car title and the right kind of financier willing to lend you the money. Read Also : Top 5 Types Of Startup Business Loans

Do I have Enough Super to Retire: Considerations Before Leaving Your Job

As you get older, you start thinking about retirement and if you have enough money to live comfortably afterward. In some cases, people don't even usually get to decide their retirement age due to health reasons. Retirement planning is an important process, and part of it is asking questions like "How much super do I need to retire?" or "Is my current lifestyle something I can afford?". According to the Australian Bureau of Statistics or ABS, the average retirement age is at 65.5 years for men and 65.4 for women. If you're someone who's nearing this age, then you should think about these considerations before you retire or leave your job. How is your account doing? Some of the biggest mistakes that people make is not knowing what their superannuation account is worth or where they're money is invested. This reason is that a lot of people don't really understand what it is and the advantages of having one. At the end of the day, it's money that you've earned, and you've set aside for retirement. Make sure to check how much you already have in your account so you can plan your retirement correctly. According to experts, you need to have at least $545,000 in your account if you’re single and $640,000 if you’re married to be able to have a comfortable retirement. This amount already covers health insurance coverage, home renovations, activities, and food. How much money do you need? You also have to take note that the amount you need will still depend mainly on how your lifestyle will be. Take this example below to find out how much you need to earn to have a modest or comfortable retirement: Modest lifestyle $27,430 for a single person $39,445 for couples Comfortable lifestyle $42,955 for a single person $60,604 for couples A modest retirement would mean that you still get to enjoy activities like eating out once in a while and go on short trips within the country. A comfortable lifestyle, on the other hand, will mean that you can go to a lot of recreational activities, get good private health insurance, buy a reasonable car and travel. Taking into account what your lifestyle is will have a great impact on how much money you need to be pouring into your super account. Where do you wish to live during retirement? After retiring, the house you've lived in for many years may seem dull and boring. Consider where you want to live as this will have an impact on your overall life satisfaction. An option that's popular for retirees is downsizing and selling off some of their assets. The reason behind this is because they want simpler things in life. They don't have kids living with them anymore, and house maintenance cost can be expensive and impossible to do down the line. Additionally, downsizing can actually help you increase your superannuation account. For example, Australians age 65 and over can make a non-concessional contribution to their superfund account for up to $300,000 from the sale of their primary home. This does not take into consideration of your work status, account balance, and history of contribution. Moreover, for couples, this amount can double up to $600,000. Downsizing has some significant advantages such as: Ability to stay closer to family and friends Ability to purchase better health insurance coverage Tax benefits Affordable cost of living depending on your location Ability to put money in other investment opportunities Are you debt free? Debt is something that can eat up a lot of your retirement income when not handled properly. Most experts advise that you carry no obligation when you retire or at least 90% as close to debt-free. Ensure that you've already paid off your mortgage, credit cards, and other types of loans that you may have. If you're planning to retire but still have a lot of payments needed for your mortgage, you may want to reconsider it or making additional payments into it. A debt after your retire can derail your plans of having a comfortable retirement. Conclusion: Taking time to ask yourself these considerations will help you get the life you want after retiring. Additionally, it helps to paint a bigger picture of how your life will be moving forward. Being mentally and financially prepared is what is going to help you achieve the life you have always dreamed of. Read Also: How To Become Financially Stable Before Age 30 How To Live Healthily Even If You Have A Full-Time Job

How to Protect Your Property as a First Time Landlord?

1. Take Out Insurance Being The Landlord:

2. Draw Up the Correct Contract:

3. Take A Security Deposit:

4. Ensure There’s an Inventory:

5. Have a Financial Buffer:

How to Protect Your Finances While in a Nursing Home

A Little on the Side…Or Not? Your Guide to Supplemental Insurance

Content Rally

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

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Related

Major financial problems that can affect a new business

Title Loan Requirements: What you Do and Don’t Need

Do I have Enough Super to Retire: Considerations Before Leaving Your Job

How to Protect Your Property as a First Time Landlord?

1. Take Out Insurance Being The Landlord:

2. Draw Up the Correct Contract:

3. Take A Security Deposit:

4. Ensure There’s an Inventory:

5. Have a Financial Buffer:

Share this Article

How to Protect Your Finances While in a Nursing Home

A Little on the Side…Or Not? Your Guide to Supplemental Insurance

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

Leave a Reply

Popular

Follow Us

Recent

Related