Expert Advice: Becoming a Landlord
Grace Brown Mitchell BALANCED PROPERTY MANAGEMENT
ALL TOO OFTEN investment and rental properties are purchased with no plan in place. While the income from real estate is considered passive, there is nothing passive about being a landlord. Success in investment real estate requires planning, discipline, and persistence.
BECOMING A LANDLORD requires forethought:
THE DEVIL IS IN THE DETAILS Just like starting a business without a plan, investing in real estate without a plan can be a recipe for failure.
Ask Yourself these 5 Simple Questions How will I acquire financing to purchase the property? How long can I afford to have the property sit vacant? How long do I plan to keep the property? Who are my tenants going to call for maintenance needs? Do I have enough money set aside in savings for large repairs?
Proper planning helps prevent the landlord from stretching into his or her own wallet to pay for monthly expenses associated with their rental property. Or, worse yet, not being able to afford to make repairs when needed. All too often I hear landlords speak begrudgingly about their investment property because they get maintenance calls from tenants that interrupt family dinners, weekend vacations and other personal time. With some planning beforehand, addressing these crucial details can be the difference between investing in a profit generating asset or taking on a life-burdening, money-pit.
SLOW & STEADY WINS THE RACE To many investors and entrepreneurs, rental real estate is considered an excellent wealth builder. The monthly income generated added with the appreciation of the property itself makes for an excellent combination. Additionally, many find this method of investing beneficial because it allows the investor to generate side income while continuing to work on other projects or continue full-time employment. This strategy allows many individuals to create wealth faster than would be possible through full-time employment alone.
However, many believe the myth that investing in rental real estate is a quick way to get rich, while reality looks quite different. Investing in real estate is a long-term game and one that each individual investor should evaluate prior to signing the purchase agreement. Each investor has their own goals for their money along with expectations on its rate of return. Success in investment real estate ultimately requires discipline to remain dedicated to the long-term vision and persistence to keep going even when things seem bleak.
While all of this may seem daunting, there are plenty of resources available for those interested in becoming a landlord. Start by forming a network to assist in the journey. Consider hiring a reliable property management firm that can offer client guidance by developing a personal, customized plan that encompasses maintenance to marketing.