There’s a big difference between successful landlords and lousy landlords. And understanding that you don’t just collect rent payments is the first step to becoming a successful landlord.
If you have a property or several properties and are interested in renting them out, here are some of the most important things you can expect about the job:
1. You must understand the law
Whether you’re hiring a property management company or handling the property on your own, you need to have at least a fundamental understanding of housing laws. You can’t just create your own contract and be done with it; you must follow local rules and regulations that ensure both you the landlord and your renters are protected fairly.
Read the Fair Housing laws and check out the local rules and regulations that you have to follow. Your area may be stricter in some aspects than others, so you need to pay attention to what is prioritized.
2. You need to be available
Although being a landlord is not a full-time job, you need to be available for your tenants during business hours. If they contact you about issues in the unit, you should be able to respond as soon as possible. Even though you don’t address the issue right then, you should make sure to respond and acknowledge the problem.
Of course, just like any other job, you can have limits to your availability as a landlord. Handle issues only during business hours, unless it is an emergency. If you are taking a vacation, on the other hand, make sure that you leave a person to contact in case your tenants run into problems in the unit.
3. You won’t become rich overnight
Unfortunately, you won’t rake in large amounts of profit in the first few months–or even years–of becoming a landlord. On average, landlords only make $200 to $400 in profit per month per property. To earn at least $50,000 in profit per year, you’d need to have ten properties that bring in at least $400 in profits a month.
4. You have to put in the work
A landlord has many roles. They can be the real estate agent, salesperson, repairman, supervisor, negotiator, and debt collector–all rolled into one. You can hire a superintendent to handle some of these roles, but that won’t be a likely option if you’re just starting, so expect to put in the work in the first few months.
5. You may have empty units for quite a while
Avoid the expectation that you will get 100% of the rental income each year. Transitioning from an old tenant to a new one can take at least one month or longer, which can put a slight dent in your income. You have to have a contingency plan so you’re prepare when your unit does not fill up immediately.
Despite the pressures and stress associated with being a landlord, it can provide a significant income stream and the freedom of being your own boss. If being a landlord is an enticing career option for you, these are the things that you can expect from the get-go.