Thinking Of Becoming A Landlord? Here Are Some Things To Know
Becoming a landlord can be a dream opportunity for many people. Renting out housing and spaces to people can be a very important investment for retirement or helping raise a family.
However, renting isn't always sunshine and rainbows, which is why it's important to have an understanding of some of the downsides, so that you can be better prepared.
Looking for Specific Kinds of Tenants Can Get You in Trouble
Not all tenants are going to be ideal; some won't pay rent, some will cause excess property damage, and others will be subject to a litany of noise complaints. Understandably, landlords aim to reduce the frequency of potentially bad tenants by looking for specific types of renters.
However, renting discrimination has historically been a serious issue and there are a considerable amount of federal, state, and local laws designed to reduce its frequency. Being careful when you advertise or refuse to rent to someone is absolutely essential, since there's always the possibility that you can run into legal trouble if you show a pattern of discrimination.
Whether you actually discriminate against potential tenants isn't necessarily important as just the impression of it can lead to potential litigation or inquiries.
Someone Always Wants to Contact You
Being a landlord is basically a 24/7 position.
There's always someone who's interested in getting your attention for one reason or another. Tenants, maintenance crew, potential renters, tax people, and legal authorities are all interested in getting you to do something or inform them about property information. As great as it would be to reserve dealing with these communications during alloted periods of time, it's often not possible.
Obviously, the smaller number of properties you have, the less you have to contend with this issue, but for those who rent out multiple spaces, the work is essentially never-ending.
Lack of Empathy from Others
This seems like a trivial consideration on some level, but as the months and years drag on, it can be incredibly draining and frustrating.
By default, landlords are thought of as "bad people" by the general public. They're often perceived as being unfair, exploitative, and mean by the majority. Of course, there are landlords who are these things, but most individuals who rent out properties are just regular people doing their jobs.
When dealing with renters, public-interest organizations, and legal authorities, there's often going to be a slight degree of contempt towards you, which can lead to substantial hurdles. Tenants may feel justified in not obeying the rules and authorities won't be sympathetic when it comes to forgiving you for highly technical renting regulations that are easy to miss.
With a great deal of regularity, you'll find yourself fighting uphill battles that you feel like you shouldn't have to.
It's common to believe that renting out properties is a relatively linear affair, but there's a lot of not-so-periodic maintenance that goes along with it.
Appliances break, things get worn down, and new regulations pop-up that require you to modify a structure. Some things always in need of sprucing up and that ultimately requires a lot of attention; usually under the stress of constant complaints, contacting repairmen, and unexpected expenditures.
All of this eats away at your time and it's possible for landlords to barely break even if the situation is dire enough.
Dealing With All The Red Tape
In most places, renting is a highly regulated industry with all sorts of laws governing the conditions under which it can occur. This is good in some ways because it offers some set of legal protections for those interested in renting out properties, but it also comes with a hefty cost: paperwork.
There's going to be a long-list of papers you need to keep track of in order to properly run your business and they all have to be compliant with specific states and localities. Lease forms are especially problematic. They list out all the tenant and landlord responsibilities in-depth, but what information needs to be contained within by law is incredibly confusing; an issue that will be compounded if you ever need to create updated lease agreements.
Making It All Work
Being a landlord can be a great route to success and financial independence, but those benefits come at a cost. In many ways, it's a very trying profession and comes with a lot of important responsibilities which cause serious problems if handled incorrectly.