Managing a rental property can be a smart investment. As a landlord, you are the owner of property that generates a monthly income that is set by you. However, as a landlord, you are responsible for everything that breaks, and you have to trust that your tenants will pay their rent without wreaking havoc on your property. It takes a lot of business sense, time and money to be a successful landlord, but if you’re up for the challenge, it can be a profitable opportunity.
Eager to invest
Investing in a property is appealing to landlords-to-be because it’s a physical asset, according to Investopedia writer Andrew Beattie. If investing in stocks, bonds or other financial entities makes you nervous, becoming a landlord allows you to literally see the fruits of your labor and investment. Although, Beattie cautions, as a landlord you run the risk of losing money just as you would playing the stock market.
Ready for a challenge
Being a landlord can challenge you in a myriad of ways, making every day different. One minute you might be dealing with a leaky pipe and the next, you’re navigating debt collecting and tax laws, according to The Balance writer Erin Eberlin. If you enjoy jumping from one role to the next, being a landlord will deliver a variety of responsibilities as well as a flexible, yet sometimes relentless, schedule.
“Landlords don’t punch time clocks and work regular hours,” writes Eberlin — what you thought would be a short visit to pick up the rent money, can turn into an on-the-spot repair call that eats up your evening.
Willing to follow (a lot) of rules
As a landlord, you will be engulfed by the rules you set forth for your tenants and the rules you must follow. From abiding by building and permit codes for your property to what questions you can ask potential tenants, the list of legal rules can seem endless. According to Eberlin, you’ll need to be well-versed in the Fair Housing Laws, know how to manage the security deposit provided by your tenants, be sensitive to health and safety codes and be up to speed on eviction policies.
Prepared for the unexpected
Nothing is perfect in real estate and things will go wrong with a property. Often, something small can snowball into a major problem, which inevitably decimates your budget and your profits. As a landlord you have to be willing to not only stay on top of small repairs but also fix expensive issues. Even if your property is picture-perfect, finding renters can be a problem, too, notes Beattie, which means you’ll have to shoulder the monthly rent bill. No renters is problematic, but renters who won’t pay can be worse.
“Unfortunately, almost every landlord has a story that involves police officers or sheriffs escorting his or her tenant out of the property — erasing all hopes of getting the five months’ worth of overdue rent,” Beattie reports. “Bad tenants can also increase your unexpected expenses and even hit you with a lawsuit.”
As a landlord, you are in charge. You won’t have to report to a supervisor or manager. You can structure your days and the way you handle your property.
“While a landlord’s life can be stressful, it can also bring the reward of personal freedom that comes from being your own boss,” writes Eberlin.
The role of a landlord will push your business, communication, investment and entrepreneurial talents to the limit.