Renting out property can be a substantial source of income when done right. However, one of the biggest mistakes I’ve seen people make, when getting into commercial real estate or property investment, is renting out property when they are unprepared for the responsibility of being a landlord. This mistake inevitably ends in a disaster of an emotional or financial nature—sometimes both. Though it’s difficult to truly prepare yourself for being a landlord, knowing some things up front can help you decide whether or not you’re ready to take that step.
First of all, it’s humanly impossible to be a part-time landlord. Being a landlord takes time, and a lot of it. You might know friends who supplement their income with freelance work or off-hour jobs, but being a landlord is not one of them. Your tenants might be the nicest people you could possibly hope to find, but that point becomes entirely moot when the toilet stops working at three in the morning. When you step into the shoes of a landlord, you accept that you will be taking calls 24 hours a day, whether you want to answer them or not. If you don’t have the time to take calls or run over to your property to deal with middle-of-the-night emergencies, you are probably not ready to be a landlord.
Also, renting out a property is a business, first and foremost. Being a landlord, like being a business-owner, requires flexibility and patience, tempered by a firm attitude and iron will. Sometimes tenants will be a day or two late with the rent because of those small crises that emerge from time to time, as anyone who’s rented a business space or an apartment has learned. That’s where the patience and flexibility comes into play. Sometimes tenants will be a week or three late with the rent for six months in a row, at which point you will need to stop being flexible and draw upon that iron will to chase down and/or evict that tenant.
Overall, owning and renting a property costs a great deal of time and money, so you’ll need to be prepared for that, as will your bank account. Having a vacant unit is expensive, as well as advertising vacant units in the right places. When a tenant moves out, you’ll need to spend the money to clean up the place before a new tenant can move in. However, if you possess the funds, the time, and the patience, you’ll find that being a landlord can also be one of the most financially and emotionally rewarding things there is to experience. Still interested? Contact me and let me help you find the best property for you to start.