Being a landlord can be lucrative, but although it can be advantageous, there are a few things you need to be aware of. Below, you’ll find six of the factors to consider before saying “yes” to the landlord’s life.
1. It isn’t a 9-to-5
Landlording is not a 9 to 5 job. Although you have freedom, this is not to say that you have total freedom. A tenant can call you at any time to report a problem, and it is your responsibility to deal with it. It is then up to you to decide whether or not to deal with it yourself or call in someone who can, such as a property management company.
In addition, its severity determines the amount of time you’ll have to spend resolving it. For instance, if it’s a broken AC heater, it will have to be repaired within 24 hours, as your tenant can sue you if you fail to address it. With that in mind, your days will be unpredictable. Some days will be “slow”, while others will have you dealing with a whole-day ordeal.
2. It demands your time
Can you commit? Be 100% sure that you are able to dedicate your time to your real estate investment. Remember, being a landlord is not a pastime, but a business you need to take seriously – if you don’t put it on priority, your business will be doomed for failure.
Be aware that you’ll have to make time to screen tenants, collect rent, repair the property, and the like. You should also set aside time to deal with unforeseen issues in your rental property, such as structural concerns that can arise at any time. If you don’t have the time, or if you don’t want to make time, you’ll have to delegate your to-dos to a property management agent.
3. You’ll do more than collect rent
A common misconception is that all landlords do is collect rent. In reality, a landlord’s duties are very varied. Here are the hats that you’ll have to put on as a property investor:
- You’ll have to show your property to potential tenants to fill your vacant units. With that said, you’ll need to know how to pitch your property to potential tenants.
- Debt collector. If your tenant fails to pay their rent, you’ll have to run after them to get them to pay up. This can be burdensome, so be certain that you can take it.
- Is your tenant’s lightbulb broken? If your tenant can’t fix it, you’ll have to fix it yourself. Sometimes, it’s better (aka cheaper) to do it the DIY way than to pay a professional handyman to do it.
- Let’s say someone complained about your tenant’s noise. You’ll have to do some digging to get the story straight, as some complaints can be due to oversensitivity.
- If your tenant can’t pay their rent due to personal problems, you have to be prepared to listen to them. They will overshare but know that they’re doing it to get you to understand.
- …and more
4. You have to follow the law
You can’t do whatever you want. For instance, if you don’t want to rent to persons of color, you won’t be allowed to do that as it would be discriminatory. Here are a few of the laws you need to follow as a landlord:
- Under the Fair Housing Act (FHA), you can’t discriminate against any tenant or potential tenant due to their race, religion, color, etc.
- The security deposit should be based on state-specific laws. For South Florida landlords, there are no restrictions as to the maximum amount you can collect, but as a rule of thumb, it has to be reasonable.
- By law, you need to put smoke detectors, carbon monoxide detectors, and more in your rental property.
- Abandoned property (your tenant’s belongings) can’t be thrown away immediately. You must try to contact your tenant and get them to claim their belongings.
- …and many, many more
Rental-related laws vary by state, so it’s best to partner with a professional property management company that’s experienced in your property’s market.
5. You need to be friendly toward your tenants
You don’t need to be best friends with your tenants, but you do need to be friendly. By being friendly toward your tenant, you’ll be able to show them that you genuinely care, and in turn, encourage them to renew their lease agreement.
Show your tenants you care by welcoming them to the property with a “care package”. On Thanksgiving, send them a freshly baked pie. On your tenant’s birthday, send them a birthday card. When you find out that your tenant is sick, send them a fresh set of flowers. If you have short-term tenants, treat them to local restaurants, bars, pubs, etc.
6. Your tenants can make or break your property
If there’s one thing you need to get right, it’s who you rent to. It is critical to screen your tenants strictly, otherwise, you will end up with tenants who won’t care for your property in the way that you would. And if you don’t screen your tenants, you’ll be forced to deal with tenants who don’t pay their rent on time, damage the property, and more.
Earlier, we said that you’d have to put on a detective’s hat – this applies to tenant screening, as well. When screening tenants, you will have to look into their background, work status, etc. to find out if they’re trustworthy.
It goes beyond trusting your gut. You need to consider the facts, too – if you aren’t confident that you can do it that way, you need to partner with an unbiased property management company that can.
Being a landlord can be a daunting task, but with a property management company by your side, it can be done. The experts at Luxury Property Care have been serving the South Florida area for years. We’re proud to have helped hundreds of property owners get their rental businesses off the ground – and we can do the same thing for you.