Surprising Truth of Being A Landlord
Whenever we think of ways to earn passive income, owning a rental property seems like the perfect choice. You will buy properties, find tenants, then profit from the rental income. You can get financial security just from managing a property – sounds easy as pie. But that is a common misconception about property management. Being a landlord requires a lot of work and it is not for everyone. This is the surprising truth of being a landlord.
According to the Rental Protection Agency’s latest data, there are 23,469,209 landlords in the United States. And the number grows by 544 new landlords daily. Do you want to know if being a landlord is for you? Read further to learn about the things you need to know about property management.
The Surprising Truth of Being A Landlord
It Requires Hard Work
Owning rental properties has lots of work attached to it. After finding the property, fixing it up, finding tenants, the work does not just end there. You will still be working on updating and maintaining the property. Even if a tenant calls in late night to report an issue, you will need to take the call and resolve it. What if you are managing multi-property homes or multiple properties? This leads us to the next truth.
The Job is Time-Consuming
Being a landlord eats up most of your time. Typically, some investors try to own rental properties while having full-time jobs. Only to find out later that managing properties are time-consuming. Thus, they end up giving up their full-time jobs most of the time. You will go between finding and screening tenants to fixing things in the house. It is one task after another. And take note, it is just with one rental property. What more with landlords who own two or more properties? I bet they are busier.
Therefore, if you are committed to investing in this industry, you need to know your priorities. Here are the questions you can ask yourself in deciding whether to become a full-time entrepreneur or keeping your job:
- How much time do I have?
- Am I ready to leave my full-time job and take a risk?
- How will I manage my time?
- Am I financially capable?
- Can I handle potential profits and losses?
It is Costly
The cost of owning a rental property is not a joke. Rental properties are not cheap. The costs may add up after buying and fixing up the property. You cannot always rely on and expect the tenants will take care of the property. Expect that there will be repairs and maintenance needed.
When you become a landlord, you risk a lot of money. True enough, it can generate passive income and you will be able to earn back the money you spent. But not in a short time. It may take years. Especially if you will consider the demand and how hot the market is. The key is – be financially ready.
Tenant Issues
Dealing with tenants is probably what you need to expect the most in being a landlord. Most of the time, you will be dealing with them directly. Whenever there is an issue, you will be the only person they will call. You will collect the payment, make sure the house is clean and they follow the rules. When you add all those tasks, it can be overwhelming. Before becoming a landlord, make sure you know how to multi-task and keep things organized. It will be helpful if you keep notes and tracks the things you need to do. You can categorize them by daily, weekly, and monthly tasks.
You Need to Know the Law
Before becoming a landlord, you need to understand the laws that are bound within rental properties. Of course, you would not want to see yourself facing legal issues while managing a property. Laws and regulations vary depending on the state. Some laws protect you as a landlord. At the same time, some laws protect tenants. This is called the landlord-tenant law.
Conclusion
Now that you know the surprising truth of being a landlord, try asking yourself again. Do you still want to be a landlord? Are you fully equipped and ready? Being a landlord has pros and cons. Besides, it is a continuous learning process. Do your research and look at the facts mentioned above. You can also consult an expert. Then decide whether or not property managing is for you.
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