Is Becoming a Landlord the Right Thing For You?
Owning rental property can be lucrative. If you have enough access to capital to buy a rental property, being a landlord may be a good idea for you. But are you the “landlord” type? Here are some questions to ask yourself to determine whether or not you should consider being a landlord.
Do I like dealing with people? As a landlord, you will need to be available to your tenants at all hours. Though you set office hours, you may have to deal with the occasional after-hour emergency. Also, not all your tenants will be easygoing. You will likely have to deal with some difficult people. Mesa Tenants have legal rights, which a particularly ornery tenant may try to use as leverage against you. There may be constant complaints, late payments and calls at all hours, especially if the rental property consists of low-income housing.
What should I charge for rent? The rental market is very competitive and your prices may be partially determined by the prices of other properties around you. If you are dealing with having to pay the mortgage on the property, you may not have as much flexibility on your rental prices as others who own their properties. You want to be able to charge enough to cover your monthly expenses and still earn a profit, but keep your rental rates low enough to remain competitive so you can stay in the Mesa business game.
Am I good at Do It Yourself projects? Many landlords hire out some or all of the maintenance for their properties, but to maximize your income, you will most likely have to do at least some of the handiwork around the property, and you can still visit the websites for house flippers. Can you do light plumbing and yard work? Can you manage the small repairs and cosmetic lifts? To help you purchase supplies you need for the repairs, you can use the payments from your renters. However, you will need to be careful when doing this. Calculate your expenses carefully to make sure you will still end up in the positive.
Do I have the right connections? If you want to really make money and move beyond just one property, you will need to expand – eventually to the point where you won’t be able to do everything yourself. Do you know any plumbers or contractors that you can count on to hire for the bigger repair jobs? Having a personal relationship with your handyman could possibly gain you a nice discount and raise your overall profit margin.
If you are a genuine people person, are quite handy around the home and have some extra capital lying around, you may make a good landlord. But beware; there are many other aspects of this decision that can be more work than you ever considered. Ask other landlords for advice, research the area in which you are looking to rent and design a rental plan that will work for your situation. Being prepared and ahead of the game before actually playing it is the key to being successful in this highly competitive business.
Written By Bert Miller – Gunderson, Denton & Peterson, P.C.
Mesa Office: 1930 N Arboleda #201
Mesa, Arizona 85213
Email: [email protected]
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Phoenix, AZ 85004
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