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42 Comments on Do You Really Want To Be a Landlord?
So many people hear the few horror stories with being a landlord and it stops them from owning the easiest business ever that creates TRUE FINANCIAL FREEDOM!
Anyone who lets one bad experience or even worse someone elses bad experience is making a terrible decision.
Rental properties are the single easiest and best way to become a millionaire. I am 38 yrs old and have enough rental NET income(above all mortgage debt, taxes, insurance expenses) to stop working today. And I did all that in just 8 yrs. From my first rental bought in 2005 to number 15 added this yr. I don't have to worry about where my next comission check is because every month I get $11,000 in rent.
Obviously good tenants is key but that is easy IMO as most people are good people. I tell all my tenants this "I worked hard to purchase, fix up, and maintain this home so that is a nice place for you to live. I will treat you with respect and timely fix any issues with the home that may happen. I only ask that you treat me and my home with the same respect. I understand things happen and occasionally you may be late with rent. If so, please just give me a courtesy call to let me know when I can expect it. I will be fair with you and I expect you to be fair with me." Then at one time during the year usually Thanksgiving I send them a personal letter thanking them for being such good tenants and I often include a $50-$100 gift card to a local store. I believe this personal touch keeps my homes in good condition. It also keeps them renting from me year in and year out. Many of my tenants have been in the same home for over 4 years.
Treat people the way you want to be treated and 99% of the time they will do the same.
Don't let the 1% scare you from becoming a millionaire---start a rental business!
Yes become a landlord....it has its ups and downs but in the long run you provide a much needed commodity to the public. The return on investment and tax benefits are definitely motivation to become a landlord. Will you have some headaches? well of course nothing is easy...Good luck.
We have a few sellers that do rent their homes, but it's been hard to find good tenants. At this point in our lives I don't know if we'd have the patience or time to be a landlord, but if I was going to I'd be like Alex in #23 and be a milliionaire. He makes it sound so easy...
As a professional property manager * I WANT long term residents that I have THOROUGHLY screened...DIY landlords who do M2M work themselves to death looking for good tenants when I have FOUND them and put them in LONG FIXED TERM LEASES.....
Many people think they will like it and find out otherwise but in the process learn a lot about who they are when dealing with people. It can be a good thing, I just advise people to make sure they have a mentor to help them while learning the process. On a property that generates enough cashflow to pay for a property mgr it can be pretty much hands off and that is the best fit for most folks I have met.
There is a right way and a wrong way to do property management. Rental properties are a business like any other. So you have to treat it like a business. Reasonably help your customers. Demand payment promptly if they are late. And it they won't pay, follow protocol and start eviction. But it is not for the faint hearted. Personally I stay away from renting the nice pretty houses because they seem to get beat up fairly fast.
Yep, MY worst experience was being the landlord for a trailer park with about a dozen mobile homes. CONSTANT nightmare, even with on-site "managers", who usually were the biggest problems (growing dope at the park, burning down the trailer they were living in, etc...)!!!!
You make some great points Joan. Being a landlord is not for everyone. I think the key ingredient to success is tenant screening. We all know there are great tenants out there and horrible tenants. Our jobs as landlords (or property managers) is to weed through the bad to find the good. I'd rather have a unit sit vacant for a few months to find the right tenant. It will cost you far less money in the long run.
I would love to own property now. Good property management can help.
Even more than owner occupied homes is how much a rental experience can vary. In our area REITs are coming in and buying single family residences as rentals. It could be a great time to venture into property manangement. I've been a landlord for years, and you have to pick both your property and your tenants very carefully. It can be a great way to make passive income for the right people in the right situations. Not for the faint of heart!
A good way to think about this when you are screening a potential tenant is:
If your house is worth $150,000, would you be willing to lend this tenant that $150,000? Because that is what you are doing when you turn over control of the house to that tenant. She now has your $150,000 -- not cash, but still value -- and you are hoping that she will pay you the interest (rent) and return your $150,000 on time and as agreed.
Good post and great summary of the ups and downs. I've recommended to my clients in this situation to use a management company to handle the interactions with a tenant. As far as becoming a landlord, I agree that its not for everyone. But for someone that can't afford to sell their home (without taking a big loss), renting it can be the only course of action. Especially if they have to move for a job or other pressing family reason.
You guys are too paranoid. Nothing wrong with being a landlord. I have done it for years. Don't worry about the damages, etc. It comes with the territory. The nice part is all of it is tax deductable, so if money is spent you are covered anyway.
Good post. Landlord can be a good retirement income and it all depends how the lease is written. We protect us very well, screening and the right tenant can be a fun Landlords life.
Fory many owners who want to lease a property, find a tough and professional property manager is the way to go.
DIY in certain businesses does have it's adverse consequences, especially landlords. If your rental property doesn't produce enough cash flow to employ a property manager and a monthly maintenance crew, being a landlord isn't a good idea.
Most DIY landlords have experienced disrespectful tenants, yet it was the landlord that allowed the tenants to rent, didn't they? An experienced property manager can sift through the rental applications and select the most qualified tenants as some have mentioned in this post.
Hi Joan, that is similar to the FSBO who once sold when the market was hot, so thinks they can do the same again. lol
I think it would be a good investment now, in the midwest, because rentals are hard to find. Plenty of apartments are available, but not homes. The market is starting to turn here and buying a home will be less expensive than renting. Plus the damage most renters do would make me hesitate.