13 Jan The Not-So-Glamorous Sides to Being a Landlord
Believe it or not, the life of a landlord isn’t always sunshine and rainbows. Between managing vacancies and maintenance to chasing down unpaid tenants, there are certainly some aspects of the job that are not as glamorous as the gig may seem. Landlords are often pushed to play the villain in our society, because nobody likes having to pay the big guy (or gal) – but at the end of the day, landlords provide an essential service: housing.
While the public may have some preconceived notions of property management, the benefits to gain from the business are, in many cases, well worthwhile. Even still, it’s important to be aware of the less exciting aspects of the gig, so you can make an educated decision about whether or not being a landlord is right for you, before you invest.
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The Pricey and Lengthy Turnover
If a landlord is going to lose time, money and patience, it’s bound to be during a turnover. Between performing unit walkthroughs and making security deposit deductions for all necessary repairs, this process can rack up a pretty penny after repainting walls, repairing floor damages and making any necessary updates to get the unit move-in ready.
Once repairs and updates are completed, it’s time to advertise and fill the property. The process of showing the unit, looking through applications and running background checks on potential tenants, is both lengthy and expensive. All the while, the unit sits vacant, costing you income.
While turnovers and vacancies can be a difficult process, it’s a rewarding feeling to have secured a new tenant. Now all you have to do is collect the security deposit and rent, set up the new lease with the tenant, and perform a move-in walkthrough for any maintenance and repairs (which, hopefully you already covered after the move-out inspection).
So, if it doesn’t go without saying – while rental property can be a rewarding business venture, it is certainly not without time, money and labor.
Tracking Down Your Money
There’s nothing that can ruin a landlord’s day more than having to track down tenants who refuse to pay. Whether a tenant fails to pay in full or fails to pay on time (or both!), it can be quite the headache to track down your money. If you’re lucky, they’ll pay up in order to avoid eviction – but this process is bound to repeat itself next time the first of the month rolls around.
In order to alleviate the deadbeat tenant, be sure to perform thorough screenings on all candidates before offering anyone a lease. Background and credit checks can tell a lot about whether or not an individual would make a reliable tenant through payment history credit reports. If a tenant has a history of missed payments, their credit score is likely to reflect it – which is a red flag that lets you know to keep looking.
Those “Special Treatment” Tenants
Most tenants keep to themselves, but there’s always the few and far between who treat your property as if they are king or queen of the castle. They may have little regard for other people by playing loud music or not picking up after themselves in the communal areas. This is not only a nuisance for the other tenants, but disrupts your building and leaves even more work for you or your maintenance worker.
Some tenants may cause damages by acting irresponsibly and insist you fix them, call you in the middle of the night for non-emergencies, or bother your other tenants. Unlike financial security, these risks are not as easily assessed through a credit check – making it a risk taken with every new tenant.
Maintaining the Maintenance
Maintenance is a job in and of itself – between routine upkeep and necessary repairs, maintaining a building can be both expensive and time-consuming. If you’re interested in becoming a first-time landlord, consider the expenses of maintenance before investing, because it can be the downfall to your budget if ill-prepared and not considered before purchasing the property.
There will always be the expected routine upkeep kind of maintenance (caulking, minor plumbing repairs, garage maintenance, painting, etc), however major maintenance repairs are bound to present themselves every once in a while, such as a new roof, burned out appliances, or a burst pipe. Every aspect to a building has a limited lifespan, and you’re bound to run into a big project every now and then. Having a sizable amount of savings set back to address major repairs is a must-have for any landlord.
Not to mention, the process of finding a trustworthy contractor who can make quality repairs without breaking the bank can be like pulling teeth. Be prepared to allocate a large chunk of your schedule to finding a trusted contractor, and know that it will likely not come without a few strike-outs.
Being the Bad Guy
It’s no secret that landlords are considered one of the evils of society – however fair or unfair it is. The general public does not run rental property of their own, so most of them do not know what goes into running a rental business – much less have compassion for landlords.
With that said, many pro-tenant activists rally for stricter regulations and to make landlords’ jobs even more difficult. Lower-income neighborhoods and cities with a “tenant-first” mentality have become increasingly more difficult to conduct business in over the last few years, with stricter regulations that make it difficult to make a living with rental property.
In It for the Long-Haul
In recent years, it’s gotten more and more difficult to find landlords who have been in the business for over a decade, and it’s no wonder why so many people opt to sell their property and move onto the next stage of life. Rental property is a huge commitment, not to mention it’s relatively thankless, time-consuming and expensive.
Middle-class landlords are often handed the short end of the stick, and between working around new regulations and competing with major leasing corporations, it’s gotten more and more difficult to make a living. So, consider the challenges of being a landlord before signing your name on the deed or converting your current residence into a rental property. If you have doubts as to whether or not you have the stomach for being a landlord, consider a property management service to allow you to own investment property while alleviating you of the headaches.
