Considerations of a Future Landlord

Real estate investment can be accomplished in a number of ways. From totally hands-off to intensive landlord and management tasks, how much time and personal involvement you put into your investing is up to you. However, if you're moving toward being a landlord and managing rental properties, whether single family homes or apartments, you might want to do some self-assessment to help you make some important decisions.

Are you personally suited to being a landlord? - Once you take on this responsibility, it's a longer term committment. There generally isn't a budget to hire a manager later if you don't like the task or aren't up to it. Do you have patience, and do you like to work with people? Your tenants will look to you to solve problems with their units, and even at times work with them if they're in a pinch for the rent one month.

Don't let your properties manage you either. Make sure that you take on only as many duties as you can handle and still have a life outside being a landlord. Burn-out has cut short many a real estate investor/landlord business. Are you able to delegate and plan for time off and not have your properties taking all of your time and energy?

Learn how to interview and select tenants. - If you're a push-over for a nice face, you might want to get help in interviewing tenants. This is a business, and poor tenant selection can put you out of business. Make a plan, have an interview prompt sheet, check references, and question prospective tenants about anything that looks odd in their applications or references. Learn how to say "NO." It's your business, so don't feel bad about turning down a renter if you need to. Particularly when you have demand exceeding supply, take the very best applicants. You cannot feel sorry for those you reject...they'll find a place to live.

Setting the Rent - Do Your Homework. - Most real estate investors and landlords know to check out the competition when it comes to determining what the market will bear in the way of rents. Aside from just looking at supply of units versus tenant demand, you should also look at your requirements and abilities. If you hate the process of screening new tenants, you may find that it's worth a little less in rent to keep them in longer leases and cut down on turnover.

Business is also personal - Notice how all the items we've discussed have some factor related to your personal abilities and desires. Though this is a business, how we react and feel has an impact on our profitability and satisfaction with our business. Take the time to do the personal assessments and make sure you'll be a happy and successful landlord.

Very, very true.

Rina's picture

One of the most rewarding things I have found in being a landlord is the relationships you form with people.

We are pretty strict on references when screening tenants. And over time, you also learn to read people (because even references can lie. Smiling ), and first impressions (even tone of voice in phone messages) is very important. One of our MOST important rules is that we don't rent to friends or relatives (with a few TEMPORARY exceptions). This might sound kind of mean, but it just isn't something I would want to risk. I've seen too many "business" ventures where one or the other feels like they got ripped off. That is the same in renting. (If a family member needed a place to stay, I'd rather invite them into my home anyway.)
Now, on the other hand, if you start out a relationship with someone new (that you have screened well) as a landlord/tenant relationship, you BECOME friends over time but you have already established the boundaries. In those cases you treat your tenants well, and they will treat you well, I've found almost 100% of the time. Smiling
AND your reputation as a good landlord will spread, and by word of mouth you can usually keep your places filled as tenants leave. (They know someone who wants to take their place, or at least have good things to say to anyone coming in after them).
I know that over time, I will have too many rentals to manage myself, but I can't see ever being hands-off. I enjoy it too much. Smiling

I wish all the best to those considering being landlords. I think the majority would love it. For the others, thank God for property managers, right? Anyone can profit, if that's an area you would like to try. Smiling Like with anything, just use due diligence.


Syndicate content