1. Research Before Becoming a Landlord
Learn how to start investing in a rental property and what it takes to become a landlord by understanding what goes into owning rental real estate. Learn how to research markets, analyse investment properties, and manage tenants and properties effectively.
If you have any questions or need guidance, feel free to contact us for personalised advice.
2. Determine Your Investment Criteria for Success as a Landlord
Once you understand what becoming a landlord entails and how to invest in rental property, narrow down your investment criteria by identifying the types of properties you want to invest in. Investment criteria can include:
Property Type
- Family home
- Holiday rental
- Luxury property
- Small multifamily buildings
- Apartment buildings
Location
- Neighbourhood
- Zip code
- City
- County
Property Characteristics
- Number of bedrooms and bathrooms
- Square footage
- Construction type
- Age of the property
Minimum Cash Flow per Door
Calculate the yearly rental income of a property and divide it by the total amount invested in the property to find out the rental yield. Aim for 7% yield or more.
3. Searching for Your Investment Property as a Landlord
Strict investment criteria are helpful when becoming a landlord, as they narrow down which properties are opportunities for further due diligence. You can search online using industry websites like Daft.ie and MyHome.ie.
4. Run Your Numbers to Succeed as a Landlord
Landlords earn money in rental real estate through cash flow—the income generated by the property minus expenses. Ideally, landlords should earn money with each rental property they purchase.
Analyse each investment opportunity by completing a cash flow analysis to determine actual rental income, expenses, and net cash flow. Knowing net cash flow helps calculate your return and determine the ideal buy price.
It’s important to analyse each investment opportunity by completing a cash flow analysis to determine the property’s actual rental income and expenses and net cash flow. Knowing the net cash flow of a property will help you calculate your return and determine the ideal buy price to yield your desired net cash flow.
5. Complete Due Diligence for a Successful Landlord Journey
Due diligence is crucial when becoming a landlord. Once you identify an investment opportunity, verify the property’s current and projected expenses, complete an inspection, and get quotes for necessary repairs or improvements. Confirm with a letting agent that the desired rent can be achieved.
6. Purchasing the Property as a Landlord
If all checks out, purchase the property. Funding options include:
- Traditional mortgage
- Buy-to-Let mortgage (different types)
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Repay interest and capital throughout the term
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Interest-only first year for Loan-to-Value up to 70%
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Interest-only first five years for Loan-to-Value up to 60%
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- Hard money loan
- Private lending account
- Syndication or joint venture
- Cash
Develop relationships with lenders or financing partners before finding a property. This ensures smoother and faster closings.
7. Get the Property Ready for Tenants
If the property is vacant or needs repair, start work immediately to minimise losses and ensure a smooth start for becoming a landlord. This could include minor or major repairs like painting, landscaping, or replacing the roof, furnace, or HVAC system. Homes in good, updated, clean condition rent faster and for higher rates.
8. Market the Property and Screen Tenants Successfully
Successfully becoming a landlord also means marketing your property effectively and screening tenants carefully. Price the rental well relative to the local market and ensure the property is in good condition to attract interest. Contacting your local estate agent can help, as they have expertise and access to potential tenants ready to move in.
9. Renting the Property as a Landlord
Renting includes signing a lease, receiving a security deposit, moving the tenant in, and completing a move-in inspection. A well-written lease is crucial as it defines rules, policies, conflict resolution procedures, and tenant-landlord responsibilities.
10. Manage the Property Effectively for Long-Term Success
Property management is the bulk of the work. You may manage rentals yourself initially or hire an experienced property manager. A property manager can:
- Market the property
- Set competitive rent based on the local market
- Show the property to potential tenants
- Screen tenants (verify references and funds)
- Collect rent and deposit it in your account
- Handle late rent and navigate eviction processes
- Address tenant complaints
- Arrange maintenance and repairs
- Pay property-related bills, including taxes, utilities, and insurance