Renting properties is a great way to receive relatively passive income, but many people make the mistake of equating “passive” income with “easy” income. This is rarely true, especially not when it comes to landlordship.
That said, it can be incredibly rewarding and might be the perfect career or side hustle. Answer the questions below to discover if becoming a landlord is a smart decision for you.
Do You Have the Financial Means?
Before jumping into the world of property management, assess your financial situation. Owning rental property requires a significant upfront investment. It also entails plenty of ongoing expenses, such as these:
- Mortgage payments
- Property taxes
- Maintenance costs
- Insurance
- Service provider costs (management companies, cleaners, spray-washers, towing companies, etc.)
- Salaries (if you hire assistance)
You should also have a solid financial buffer to cover unexpected expenses or periods of vacancy. Consider whether you can comfortably afford these costs without overextending yourself financially.
Do You Have the Emotional Means?
Becoming a landlord requires patience, resilience, and the capacity to handle difficult situations, such as tenant disputes or property issues. Reflect on your emotional readiness to manage these potential stressors.
Are you prepared to handle the ups and downs of the landlord-tenant relationship? Your ability to navigate such scenarios is integral to your success.
Do You Have the Time?
Owning rental property is not a set-it-and-forget-it investment; it demands regular attention and effort. From routine maintenance to tenant communication, your to-do list will be long. Hiring a property management company takes a lot of this off your plate, but you’re never completely off the hook.
Evaluate your current schedule and determine whether you can dedicate the necessary time to manage your property effectively. If your other commitments leave little room for landlord duties, reconsider whether becoming a landlord is a smart decision for you.
Do You Have the Hard and Soft Skills for the Job?
Success in property management requires a unique blend of hard and soft skills. Just a few of the most important skills for property managers include effective communication, financial analysis, conflict resolution, marketing expertise, and technical knowledge of property maintenance.
Assess whether you possess or are willing to develop these skills. Strong management capabilities are important for making the job easier and contributing to your success.
Before hastily diving into the landlord role, evaluate your financial stability, emotional readiness, time availability, and skill set. Becoming a landlord can be very rewarding, but only if it’s right for you. We wish you the best of luck as you investigate this potential career or side hustle!
