If you’ve considered purchasing residential property that is suitable for tenants, this means you’ll be the landlord of the property. While this may seem like an easy task, there’s a lot that goes into this position, and it’s important to make sure you’re prepared for the job. Here are a few questions you should ask yourself before you take on this new venture.
Can I afford to be a landlord?
Being a landlord is more than just renting your property. Since you’re the owner of the building, it’s your responsibility to take care of homeowner fees. You’ll also be covering the bill when repairs need to be done. Just because you can afford the mortgage for your property each month (which is important in case your tenants miss a month of rent) doesn’t mean that you can truly afford to be a successful landlord. Become familiar with all the cost of property ownership and understand the landlord and tenant laws before making the big leap.
Am I willing to get dirty?
Whether you have construction skills under your belt or know some quality contractors, you’re going to have to do some hands-on work when it comes to getting the property ready for tenants. You’ll have to delegate tasks, take a good look at electrical wiring, and maybe even cut a piece of wood or two in order to ensure that your property is in its best condition. This will be time-consuming and physically demanding, so make sure you’re up for the challenge before you get started.
Can you make a profit?
The profit you’ll make from being a landlord should be enough for you to cover maintenance of the property and the monthly mortgage payment, with some left over as a source of income. Consider the city and state where you want to become a landlord and learn about the capitalization rate in that area. Become familiar with the trends in your local housing market so you’ll have a realistic idea of how much money you’ll make.
Are you a people person?
Landlords often have the reputation of being mean and slow to assist their tenants. If you truly want to be successful as a landlord, think about whether you’re a people person. Are you willing to listen to the concerns of your tenants? When something needs to be fixed in your building or house, do you tend to it right away? Are you willing to make improvements and upgrades on your property as often as possible? Are you understanding when tenants need to make arrangements for their rent every once in a while? These things will help you determine if being a landlord is truly for you. These factors will also make your properties especially attractive to tenants, so that your landlord business can turn into a lucrative income opportunity for you.
Are you willing to attend to emergencies?
Emergencies don’t wait for a convenient time to happen. It could be the middle of the night when you receive a phone call from a frantic tenant wondering what to do about the water leaking from their ceiling from that thunderstorm you didn’t know was going to happen. What if the air conditioning goes out during the Oklahoma 100 degree plus weather? If you are on vacation, do you have someone in town to attend to emergencies? Being a landlord will require flexibility and resourcefulness for when the unexpected happens.