Many people get into property investment, owning and managing rental properties because of the idea of passive income. On paper, it seems to be every person’s dream come true. The reality is quite different.l There’s more to being a landlord than just handing out keys to rental units and waiting for the money to roll in as you sit back and collect rent checks each month.Owning rental property requires a lot of hard work, patience, and meticulous planning. It’s true that owning and managing can generate sizable income, it’s important to understand that it is still a job that requires time, effort, and dedication.There are advantages and disadvantages of this job. Some of the pros that draw people in are the prospects of a monthly pay check, equity as an investment,financial and personal independence, which are all very attractive.
If you are considering becoming a landlord, it is important to first make sure that your strengths, personality, lifestyle habits and schedule fit with the daily expectations and duties required to be a successful landlord. Only you can decide if becoming a landlord is worth your time and effort. By knowing what you are getting yourself into before you do it, you will be much better prepared for the obstacles and challenges that you encounter along the way.
So do you want to earn a living through owning and managing rental properties?Take some time to thoughtfully consider the pros and cons. There are great perks to the job, but also certain drawbacks. Take some time to answer these questions honestly if you are considering becoming a landlord but are still teetering on the fence. These questions will give you insight in to whether you have what it takes to be a star landlord.
Are You Okay With Giving Up Your 9 to 5 Work Schedule?
The daily life of a landlord is very similar to that of an entrepreneur. Your work life will be less structured in many ways, and it will take good time and stress management to handle the impromptu and spontaneous tasks coming your way. Gone are the days of your structured schedule where every day begins at 9:00 a.m on the dot and ends at 5:00 p.m. The life of a landlord can be very erratic.Experience landlords will tell you that each and every day is different. You may only work half days some days, and much longer days on others. Your daily obligations can change quickly in order to take care of any tenant needs and requests. Your daily obligations can change and will change spontaneously. You may be expected to meet your tenants at a moment’s notice to collect rent, deal with repairs or address any concerns that they have.
Are You Able To Work Autonomously?
Do you have the skills and ability to be an independent worker and take leadership to drive the direction of your business’s growth? As a landlord, you will need excellent time management calls, especially if you don’t have a team to help you execute all the daily tasks. You are in every sense an entrepreneur. If you can’t even get yourself up in the morning, or if you are not good at setting goals for yourself and accomplishing them within a reasonable time frame, then you should think twice about becoming a landlord.
Do You Like To Do Things Yourself?
Are you the type of person who likes to do your own work and fix things around the house? If so, you might be a good candidate for becoming a landlord. When you first start out in the business, it doesn’t make any sense to outsource the work to independent contractors if you want to turn your rental income into profit. By doing things yourself, you save money. You will be called to handle repairs and be a skilled leader in overcoming obstacles on a daily basis.
Are You Good At Wearing Many Hats?
As an property investor and/or landlord, it is your responsibility to play many roles. You will have to be a good realtor, net worker, negotiator, researcher,salesperson, repairman, debt collector, supervisor, and more. Most landlords start out with just one or two properties. At this stage, it’s not necessary to hire a team to help you. You may not have the money to allocate to extra help, which means you will have to learn to make do with doing a lot of these tasks yourself. You will have to do things like, advertise and list your properties,set up appointments with prospective tenants, screen tenants, make hard decisions, and this is all just the tip of the iceberg.
Just because you have a purchased property does not mean that you will steady income right away. Your job as a salesperson will be to give exposure to your property and find the right tenant to move in. You are selling yourself and your property to prospective tenants just as much as they are selling themselves to you. Why is your property the right fit for them? Why is it more desirable and valuable than other similar properties on the market? Ultimately, how do you convince prospective tenants to rent from you? These are all skills that you will need to develop if you don’t already have them.
The landlord also has to play the role of detective when trying to select the right tenant for a property. Every landlord should gather information about the tenant through applications, in-person meetings, credit and background check sand references. However, these are just the bare minimum of what you should and can do. It takes an experienced eye and assertive instinct to analyze all the information gathered, to determine if a tenant will be the right fit for your property. There are little clues you can look for, such as how an individual carries himself or herself, whether they look like they take care of themselves, because if they can’t even take care of their appearance, chances are they won’t bother too much taking care of your property. Does the person in question have a track record of paying rent late? How long did their previous leases last? Why did they end their lease? Was there an eviction? Complaints from neighbours? Bad reports from their references? It’sup to you to investigate and find out the truth because you can’t always take people’s word as the ultimate truth. Everyday will have its own set of challenges, and you will need to either excel at problem solving or enjoy a challenging non-routine work-life.
Having to double up as a repairman is one of the negatives that often stop people from managing and owning their own properties. A landlord needs to have extensive knowledge about how to handle maintenance requests. You may be called to fix anything from broken doorknobs, clogged toilets, burst water pipes,malfunctioning air-conditioning or heater systems and so on. As a landlord, you need to be ready learn new things everyday. Self-education is crucial and will save you a lot of time, money and tenant complaints.