Facing Old Tax Debts: Tips for Business Owners and Individuals

What to do when you buy rental property

by Ilkay Massink

If you are thinking about buying rental property, you might only be concerned about current renovations and the budget you have to work with. However, there are quite a few other things to think about shortly after you purchase the property.

You Need a Lawyer

One of the first things to do when you buy rental property is to get a lawyer. Any time a legal issue comes up, you already want to have a lawyer to turn to and prepare paperwork and deal with the court so you don't have to. For example, if you need to evict a tenant, it is a long and complex process. The lawyer can help you with the required eviction paperwork so it is done legally and efficiently. You may also want a lawyer when preparing lease agreements for new tenants.

Know How to Find Good Tenants

Finding the perfect tenant for your rental property is a lot harder than you might think. There is a lot to think about, from checking references and running background checks, to verifying income. You want to make a list of requirements for your tenant, such as how much money they must earn and what is acceptable on their background check, then be vigilant when screening applicants. It is okay to be flexible to unique situations, but weigh the risks and the rewards for certain tenants if they have a brand new job or might not have much in savings.

Budget Repairs and Renovations

While you may have budgeted the initial renovations shortly after purchasing the property and before renting it out, this is not the last of the work you will need to do in the apartment or house. You will also need to perform regular maintenance and repairs while the tenants live there, as well as improvements when a tenant moves out and before the next one moves in. Make sure you have a flexible budget as it can be anything from needing new plumbing to replacing all the carpeting.

Get more Information About Taxes

Owning rental property also includes a lot of complicated tax situations, so it helps to have an accountant specialising in them. For example, you will need to know how to file taxes for a rental property, how to calculate tax deductions for operating expenses and repairs, and what tax depreciation is. The latter is important because it can help provide an excellent deduction, but you need help from a qualified tax depreciation expert like those found at Capital Claims to help you.