If you have been tempted by the idea of investing in real estate, there may have been an issue that stopped you short: the idea of being a landlord.
It’s fair to say that landlords aren’t particularly well-regarded in modern society. Landlords are often depicted on TV as mean and unscrupulous, and there’s relatively little common understanding regarding how much work is actually involved in renting a property out. If you have been put off the idea of real estate investment as you’re concerned about what being a landlord might be like, then you’re not alone.
However, there’s a huge amount of confusion about what landlords actually do, how they operate, and what their everyday life is like. Real estate investment is too potentially lucrative to dismiss as a result of misconceptions, so let’s try and set the record straight…
Are there any legal requirements to be a landlord?
No, there are no personal legal requirements to be a landlord. However, the property you own must meet building code regulations. These vary from state to state, so make sure you check with your local authority as to their exact requirements.
How much of my spare time is being a landlord going to take?
Frankly, not much, especially if you choose to outsource many of the maintenance tasks. Real estate companies can find and contract tenants on your behalf; the likes of Schemel – Tarrillion can provide renovation and maintenance services; and property management companies can ensure all runs smoothly throughout the year. If you’re happy to outsource, then very little of your spare time will be consumed by landlord tasks.
If you would rather self-manage, then you can expect to need a couple of hours per week to deal with regulations, check rent has been paid, and schedule maintenance tasks. If you are between tenants, then the advertising and showing process can take awhile, but this shouldn’t be something you have to do particularly often.
How can I be sure I make a profit as a landlord?
The most simple way is by buying the right property, in the right area, with the right mortgage. Ultimately, these three factors above all else will decide how successful your landlord career actually is.
If you’re concerned that you do not have the expertise to locate a property that fits the above criteria, then it’s worth looking to buy properties that are already rented. If the property has successfully been let in the past, it’s clearly desirable, and you should be able to continue that trend.
Is property investment really a viable form of saving for the future?
One of the major benefits of renting your investment property is that the mortgage can be paid from the rent you collect, making it an investment that can — quite literally — pay for itself. In 20 or 30 years, your tenants will have paid the mortgage off for you, and you’ll own an entire property outright. It’s pretty hard to deny that’s a great investment result!
After reading through the above, you should have a decent idea of what life as a landlord might actually be like. With this in mind, you can now make a decision regarding real estate investments with the full facts available to assist you.