Becoming a landlord sounds like an ideal situation for many individuals. You locate the right property, purchase it for a reasonable price, find the perfect tenants, and collect rent every month. Easy peasy! Sometimes you get lucky, and it really does work out that way. However, it is important to be realistic about the situation.
If you want to become a landlord, you must treat this position as a job and put forth the necessary effort in order to make this a successful venture. To help you get a true understanding of what it entails to become a landlord, following are a few important questions to ask yourself.
Do you live near your rental property?
While it is not imperative that you live within close proximity to your rental property, it can make things much easier on you. There are times where you may need to show the property to potential tenants, make sure your current tenants are taking care of the place, or handle any repairs that need to be addressed. It will be much more convenient to handle all of these details if you live near the rental property. If that is not possible, you always have the option of hiring a property manager to take care of these matters for you.
Do you have an understanding of the rental laws?
There are federal, state, and local laws in place that pertain to rental properties. To cover all of your bases, you need to educate yourself on these laws. These provisions cover matters such as handling security deposits, evicting tenants, enforcing anti-discrimination practices, and providing reasonable accommodations if a tenant becomes disabled. You may not ever find yourself in a situation where one of these laws needs to be followed, but it is important to know what is possible and how you should proceed.
Are you prepared to screen potential tenants?
Buying a rental property is a significant investment, so you want to do your due diligence in finding the right tenants. While it may be tempting to get someone in there quickly to start bringing in some income, this is not always the smartest decision. Before offering someone your rental property, you must screen your potential tenants. This includes performing background checks, checking their credit scores, confirming job details with their employer, and calling former landlords.
Do you have the time to treat this like a business?
As a landlord, there is going to be a lot expected from you. This cannot be a side gig that you expect to spend a few hours on in the beginning, and then set it aside. You must treat this like a business. This includes collecting rent, inspecting the property regularly, handling any repairs, and anything else that may come up throughout the process. If you are interested in becoming a landlord but do not necessarily have a ton of time available, this can still be an option for you. With the right team of professionals helping you out, having a rental property can still be a successful venture.