Have you ever wanted to be your own boss? Would you like to be able to work the majority of the day from the comfort of your own home? In order to fulfill this dream, a lot of entrepreneurs will enter the rental real estate market. When only looking from the outside in, being a landlord looks uncomplicated, but this couldn’t be further from the truth. There is no doubt that the rental real estate market offers a unique way for you to make money, but you should first familiarize yourself with the struggles that you’ll face.
Unfortunately, landlords have an enormous amount of liability for their properties and are somewhat responsible for their tenants. As a landlord, you will always be at risk of facing a lawsuit, even if you are not directly responsible. For instance, if one of your tenants gets injured due to a faulty appliance or broken stairs, you’re going to be held responsible. The tenant could easily sue and this could financially cripple your business.
With some careers, you always know what is going to happen from day to day. As a landlord in rental real estate, this is not the case. At any point in time, you could receive a phone call from one of your tenants complaining about their property. Perhaps their hot water heater has broken or their heating and air conditioning unit has malfunctioned. In this type of scenario, you’ll be responsible for rectifying the problem with your own money. Even if you have an in-team electrician and HVAC technician, these unexpected expenses can still put a damper on your earnings.
While the aforementioned problems are bad, trying to deal with unruly tenants is even worse. Landlords will often find themselves dealing with bad tenants, who cause extensive damage to the property, or the ones who are late in to pay their monthly rent. Even worse is the fact that trying to get a non-paying tenant evicted is far more complicated than you could ever imagine. It could take months for the eviction to be finalized. During this time, you will receive no income from the rental property.
One of the first steps to becoming a landlord is finding a tenant for your property. This can be very difficult and incredibly time-consuming. You’ll need to sit down with multiple prospects while attempting to learn more about their background and history. Will the individual in question be a problematic tenant? Will they actually pay their rent on time? These are questions you will need to answer before allowing them to rent one of your properties. Thankfully, the Internet and services like e-Renter have helped to make the tenant screening procedure substantially easier. And of course, tenant screening is a necessity!
Nevertheless, being a landlord is not all fun and games. In order to be successful, you should maintain reasonable expectations and put together an emergency fund. The money set aside will prove to be enormously helpful while trying to evict someone that will not pay and when attempting to fill vacancies.