Becoming a landlord can be a great way to make a living, but it is not necessarily a great fit for just anyone. Being a landlord can be incredibly stressful and despite what you might think, it is a full-time job (sometimes it might even feel like two full-time jobs). So, before you take on the responsibility, you need to make sure that it is the right employment move for you. Here are some general questions to ask yourself and things to consider before you make a commitment that you might not be ready for.
Do You Know What Being a Landlord Actually Means?
Landlords work around the clock, meaning that if you want a Monday through Friday, 9 to 5 high-paying job, being a landlord is not for you. Because you never really know what will happen in the future, it will be pretty tricky to organize a set weekly schedule as a landlord. Sure, there will be times when things are slow and you might find yourself with little to do, but there will be other times when one tenant calls because the bathroom pipe burst and there is water everywhere, another tenant calls because they got locked out of the apartment, and then a third tenant calls because their oven quit working and they think they smell gas. If anything goes wrong, you get the first call and have to organize repairs or try to do them yourself. Sound like fun?
Learn the Rules and Know What You Can and Cannot Do
If you are the owner of the property (or you plan on buying for the intent to rent), there are tons of rules and regulations that you have to follow. We wish it was as simple as buying the house, renting it and enjoying the many benefits of owning rental properties, but it just isn’t. You need to understand the real estate market in order to buy the right property so that you end up making a profit.
You also need to understand how to handle prospective tenants and then how to keep the good ones happy. For instance, when you are looking for a new tenant, there are loads of things that you aren’t even legally allowed to ask them and there are specific ways in which you have to get security deposits. The property itself also has to adhere to a list of codes and rules in order to even be rented, so definitely do your homework early.
We get it, you want to be the cool landlord who is friends with the tenants, but don’t let that get in the way of your livelihood. A good landlord knows how to set boundaries and enforce rules – all while being friendly and kind. For instance, if you set a timeframe on when rent has to be paid, enforce it. If you find yourself in a position where you start feeling bad for your tenants and think to yourself, “I’ll let it slide just this once,” you might find that you keep getting put in that same position. Remember, you need this rent money to make your mortgage payments, so be firm early on what you expect and what will not be tolerated.
Still Here? Now for the Good Stuff
If you haven’t been scared away yet, now is the time to learn about some of the perks of becoming a landlord. Once you figure out the little things and everything starts moving smoothly, you will notice that it is pretty nice to be your own boss (assuming you are also the owner, of course). In the end, you decide everything and you set your own schedule. Aside from the money you will be making, which could easily turn into your retirement fund when you are older, being a landlord also gives you some serious personal satisfaction. It is a big deal to manage a rental property, because not only are you taking on a ton of responsibility for the property itself, you are helping to create a life for those renting your property. Oftentimes, tenants and landlords develop personal friendships that can last a lifetime (assuming you figured out that tricky balance between the professional and the personable), which can make all of the stress more than worthwhile. So, be proud of yourself if you make it this far. You deserve to enjoy it.