Realty411 Magazine The Future of Real Estate is Here | Page 43

F
or many people, the
first foray into creating
income from real estate
comes from renting out
a home they already
own. Life changes and economic
conditions can quickly turn home-
owners into landlords. But making
that shift successfully requires
re-thinking your role and your rela-
tionship to the property. Close Out Utility
Company Accounts
Although some landlords choose to cov-
er certain utilities, that usually happens
with a multi-unit property. Before rent-
ing out a house, though, it’s important to
ensure that you’ve closed out any utility
accounts held in your name. Tenants
will need to start their own utility ser-
vices so that the new landlord isn’t held
responsible for missed bills.
Change Your Insurance
If you decide to rent out a home
that once was your primary resi-
dence, an important first step is to
switch from a standard homeown-
er’s policy to rental home insur-
ance. This covers the property itself
and provides liability protection,
but it doesn’t cover possessions,
furnishings, and the like. That be-
comes the responsibility of tenants,
who can get renter’s insurance to
protect any possessions they bring
onto the property. Prepare to Deal
With Tenants
One of the most daunting tasks facing
new landlords is actually renting out the
property. It may be simple to advertise
the house for rent, but then come steps
like screening tenants and finalizing
the lease agreement. Inexperienced
landlords may fail to screen tenants
carefully, or leave important clauses out
of the lease or rental agreement. Getting
the help of a real estate professional or
Jason Hartman has been involved in several
thousand real estate transactions and has owned
income properties in 11 states and 17 cities.
His company, Platinum Properties Investor
Network, Inc. helps people achieve The Ameri-
can Dream of financial freedom by purchasing
income property in prudent markets nationwide.
Jason’s Complete Solution for Real Estate In-
vestors™ is a comprehensive system providing
real estate investors with education, research,
resources and technology to deal with all areas
of their income property investment needs.
Contact Jason at www.JasonHartman.com or
714-820-4200.
Realty411Guide.com

PAGE 43 • 2014

even a lawyer to create a good rental
agreement can help forestall issues
down the line.
Plan for Tax Time
As a rental property owner, you’ll be
reporting rental income on your taxes.
But you’ll also be reporting a variety
of deductible expenses. Although tax
laws are subject to change, the long
list of deductibles begins with your
mortgage interest and includes such
expenditures as real estate taxes, costs
of advertising the house for rent,
travel, accounting and depreciation
on the house. Repairs and renovations
can also be deducted under certain cir-
cumstances. And you can also deduct
expenses related to your home office,
which brings us to the last point:
Think Like a Professional
If you’ve made the shift from home-
owner to landlord, you now have a
business, so it’s important to see your
income property in that light. Even
if you choose to outsource aspects of
managing the property to a manage-
ment company, you’re still the one in
charge. Maintaining a home office,
keeping goof records, and establishing
a businesslike relationship with ten-
ants builds credibility and establishes
authority.
Renting out your residence may be
a response to unexpected circumstanc-
es, or the first step toward an investing
career that involves multiple proper-
ties, as Jason Hartman recommends.
With careful planning, though, learn-
ing to think like a landlord can save
headaches and open doors to building
long term wealth.

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