6 Challenges to Become a Successful Landlord in California

Is becoming a landlord in California really profitable? 

Well, it depends on your preparation, market study, and management skills. If you’re good at these things, you can stay at the top of the game, otherwise, you’re running through the pitfalls of this business. Read here the concerns involve in this profession and the ways you can tackle them.

Most people want to be landlord in California as they think it is a lucrative profession. This is because it secures monthly cash flow from the rental properties. But being a landlord is not an easy job at all and requires you to work on several things to be successful in rental business.

Given the laws, market conditions, disputes, business practices in California, a landlord has to go through many challenges. So, he should be educated, industrious and skilled in property maintenance and tenant management.

Whether you’re existing landlord or thinking to be so, here are the things you must work on to thrive in this profession while minimizing the associated risks and troubles.

Can You Deal with ?

Finding right tenants is one of the biggest challenges associated with the job of landlord. You don’t know when they stop paying rent; give your property an ugly makeover or acquire it. They can sue you for the poor property upkeep and can take stay on your eviction.

A savvy landlord always screens his potential tenants and may perform a background check on them before allowing them to let in. It includes credit and criminal checks, and contacting their job employers or past landlords. You can use these criteria to check your tenants if they are the right person.

Do You Know the State’s Laws?

California has its own laws regarding landlord-tenants disputes, eviction, rent deposit limit, late fee and notice periods. For example, a landlord in California is subject to big financial penalty if he doesn’t add disclosures about utilities and issues in his property to lease or rental agreement. Similarly, a landlord must give his tenants a notice of at least 30 days. Well, there are many guidelines issued by the State of California which should be known by every landlord. 

Do You Know About the Tax Deductions?

Like other US states, there are provisions of tax deductions on assets, loan interests, repairs and maintenance, utilities and other expenses for rental properties in California.

But it is challenging for your tax planning as the interest rate is deductible while the expenditure done on property and the amount you collect in rent is not. It is tricky if you own multiple renting properties, as you need to organize them by keeping accurate records.

Some of the major tax deductions for landlords in California are:

• Loan Interest Points
• If you have financed the property, a loan interest on that amount is tax deductible.
• Depreciation of Assets
• It includes a value of structure, improvements and equipment
• Tax Deductions:
• It includes tax relating to state, county, city taxes, social security, permit and inspection
• Repairs:
• It includes fixing, replacing of switches, and labor costs

What is Your Rental Property Type? 

One of the traits of efficient landlords is that they start with the small. This makes sense because smaller residence unit, like single family homes requires less capital and low maintenance in comparison to the big apartments.

Is Your Property at Right Location? 

An old saying in real estate circle goes on like this—location, location, location” which is still relevant. A tenant would attract to the property locating amidst the good schools, safe neighborhood, easy access to transport, and area growth. Conversely, no sane renter would like to reside in the home which backyard facing freeway. He doesn’t consider a home locating on a four-lane road either. If you have property at these locations, you know it’s very hard to find renters, let alone making the profit. So, location makes big difference and you can find it with through research and guidance from good real estate agent. Finding a home in a good location will ensure you a good return while it would be easier to sell later on.

Do You Pay Attention to Your Property Maintenance?

It is very essential to attract the potential renters while keeping the market value up through curb appeal. You should put effort in the regular maintenance of your property, no matter if it’s newly built or an older accommodation. Remember, you can fix the issues easily and cheaply, if they are recognized quickly. That’s why you need to pay regular visit on you rental homes. From little things like faucets, leaky roofs to the bigger concerns like roof, tiles and flooring, check everything to recognize the signs of trouble.

Besides, maintain a cordial relationship with your tenants and encourage them for the upkeep of your property.

You always reap the benefits with well maintained property, whether it’s as tenants or its appreciation while selling it.

So, you have known that becoming a landlord in California is really a hard work and challenging.