If you are considering a career as a landlord, there are some things you
need to know first. Here are five things you should know before
becoming a landlord.
1. Being a Landlord Is Not a 9 to 5 Job
The
daily life of a landlord is much more impromptu than structured. It is
not the type of life where you get to work at 9:00 A.M, go to lunch at
noon and leave at 5:00 P.M. One day you may have one hour of work to do
while the next you may have fifteen hours of work.
Your daily
obligations can also change on a dime. You may be expecting to go to
your property for ten minutes to collect rent, but when you get there,
your tenant asks if you can look at a small leak they have.
You have three choices:
*You can disregard their request.
*You can call a plumber or handyman to look at the problem.
*You can spend the time to immediately troubleshoot the problem.
If you decide to address the problem immediately, your ten minute rent collection can quickly become a three hour ordeal.
2. A Landlord Wears Many Hats
It
is hard to truly define what a landlord does because a landlord does so
many different things. You must be able to adapt to these different
roles to have a successful career as a landlord. Here are some examples
of the roles a landlord plays:
*Realtor
*Salesperson
*Detective
*Negotiator
*Debt Collector
*Repairman
*Therapist/Counselor
*Supervisor/Watchdog
3. There Are Legal Rules You Must Follow
Many
people think, I’ll buy a property, rent it out and make some money;
easy enough. If it were that easy then everyone would do it. There are
many legal rules you must abide by when you become a landlord.
For example:
*There are things you can and cannot ask when interviewing perspective tenants.
*There are Fair Housing Laws which dictate what is considered discrimination.
*There are certain ways you must handle a tenant’s security deposit.
*There
are certain housing safety codes your property must abide by- such as
hard wiring smoke detectors or properly handling a lead-based paint
hazard.
*There are health codes to adhere to- such as providing working plumbing and freedom from insect or rodent infestation.
*There are also proper and legal ways to evict a tenant.
4. There Is a Learning Curve
You
could be a very intelligent person, but if you do not have experience
being a landlord, you will inevitably hit some bumps in the road and
unfortunately some craters as well. There is only so much you can learn
from reading or from speaking with others. This is the type of career
where real life experience is often the best teacher.
In
landlording, one plus two does not always equal three. For example, your
tenant sees a mouse. Logically, you call an exterminator to get rid of
the problem. However, when the exterminator comes, they go into the
crawl space and notice that you also have extensive mold developing.
Your open and shut case of getting rid of a mouse has now become a mouse
problem and a mold problem, and probably four times as expensive as you
had budgeted for.
Another example of a learning curve is when
you select tenants for your property. When you first start out, you go
through all the typical steps to screen a tenant. You think you’re doing
everything right, but one month later you’re having problems and are
forced to evict the tenant.
After you have been a landlord for a
while, you rely on the logical steps, but also on your instincts to
select the right tenants for your property. You may find that tenants
who answer rental ads on web portals are higher quality than those who
answer rental ads in the newspaper or that people who view the apartment
on weekends or after normal work hours are higher quality than those
who view it at 1:00 P.M. on a weekday.
5. It Is Very Rewarding Work
Yes,
there are the headaches and the struggles that come with the life of a
landlord, but there are also great rewards. Of course there is the
monetary reward. There is the reward of personal freedom that comes from
being your own boss. There is also the pride that comes from seeing
what you have been able to build up and maintain with your hard work.
You
will develop personal relationships with your tenants. The fact that
you are able to provide a home for another human being is an
accomplishment in and of itself. You will see children grow and tenants
come and go, but you can take pride in the fact that your property has
provided a home for all these people, and will do so for years to come.
In addition to providing a home for others, you also have the
opportunity to leave a nest egg for your own family.
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