Before you place an ad in the newspaper to advertise your rentals, you need to check with your town's city clerk's office to find out what you must do to officially become a landlord. There are often fees that must be paid, as well as inspections of the properties, etc. You want to make sure that you do everything the proper way so that you can avoid any potential problems. Every town has specific expectations of property owners, which is why it's imperative that you check out what the requirements are prior to searching for people to occupy your rental properties.

You can't predict when something may go wrong with any of your properties, so if you have people living in them you need to ensure that you have adequate financial backings in case of an emergency. If the air conditioning stops working in the middle of July, you can't tell your tenant that you'll have it repaired when you get the money. If it is in your lease that the apartment or house comes with air conditioning then you must ensure that it (and whatever else is stated in the lease) remains in working order at all times. You don't want to be taken to court by one of your tenants for failure to make necessary repairs. This is why it is imperative that you have funds available, as well as adequate insurance to cover any issues that may arise.

Many landlords obtain credit checks prior to allowing perspective renters to move into their properties. The average cost of a credit check is about $35, but some landlords choose not to perform credit checks, though. This is totally up to you, as well as exactly what type of credit you will and will not accept. Having good credit doesn't necessarily mean that you will have a good tenant, so you need to take this into consideration when deciding which screening process you will use when choosing individuals to occupy your properties. There are other ways to screen possible tenants, and you should always obtain a background check on anyone that you rent to. You don't want to be responsible for providing housing to a pedophile in a family oriented neighborhood, or a convicted drug dealer. Another thing that you absolutely want to verify on each renter is employment. Check stubs and sometimes even actually calling the employer to verify employment is a must.

Another thing that you need to take into consideration when deciding whether or not to become a landlord is to check the numbers. By comparing what the average rent for the areas that your properties are in, as well as your other costs, you'll be able to determine if renting would even be worth your while. If your mortgage is $200 higher than the average rent for your properties and neighborhood, you may need to seriously reconsider renting them out. If you try raising the rent to cover your expenses, despite the amount of other rentals in the area, you may very well be placing newspaper ads week after week, as renters will undoubtedly choose to rent elsewhere. This would cause you to lose money, not only because the property or properties will remain vacant, but because you will have spent a great deal of money on advertising.

You must beware that being a landlord can cause your credit score to drop significantly. If for some reason your tenants pay their rent late, you need to make sure that you can afford to make the payment to the mortgage company out of your pocket, otherwise it won't be your tenants' whose credit is affected, but yours. This is why it's imperative that you make sure that you rent to only responsible, preferably working adults who can comfortably pay the rent on-time each month. If your mortgage or mortgages have been paid off, then that is a definite plus, but there are still taxes, insurance, and other expenses that must be maintained on the properties, which you can pay out of the rent. So if you can't afford to pay the mortgages and/or other costs should your tenants pay late, you may need to reconsider renting out the properties. Perhaps selling would be a better choice.

Although renting out properties can prove to be quite lucrative, it can also be somewhat of a hassle as well. The necessity to evict certain tenants and take them to court can prove to be quite stressful, among the many other responsibilities that you would have as a landlord. You must ensure that you properly screen each individual before allowing them to rent from you, or you could end up dealing with a very unpleasant situation. You never know when renters might destroy your property, pay chronically late, etc. There are numerous other possible scenarios that you could have to deal with. So, if you aren't scared off with all that being a landlord entails and you still want to pursue it, then by all means, go for it, and take advantage of every bonus involved, including major tax breaks.