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A Day in the Life of a Landlord
Dec 19, 2020 | Uncategorized
Are you considering becoming a landlord? Being a landlord comes with its set of challenges, but the job can provide you a financial cushion.
A day in the life of a landlord includes maintaining the units, collecting rents, and dealing with tenants. Unit maintenance is one of the biggest hassles of being a landlord. However, property managers can make your job easier.
Here, we capture the core duties of a landlord.
Rental Income
Passive income is the biggest advantage of being a landlord. You can receive a guaranteed income as long as your tenants pay on time.
As a landlord, you’ll receive an automatic income without doing anything. You can receive additional passive income if you own properties with multiple units, such as an apartment complex or a duplex.
In addition to paying your living expenses, a passive income can:
Secure your retirement
Provide additional money on the side
Additionally, passive income can provide a substantial financial cushion if you fall on hard times. However, you may encounter situations where tenants are unable to pay rent. If you own multiple units, a certain portion of your tenants will be late or cannot pay rent at all.
To achieve a stable income, the rental income must also surpass the cost of running the units. Expenses can include property taxes, maintenance, insurance, etc.
Plus, the taxman could take a substantial chunk of your income. The IRS will tax your rental income as ordinary income. The good news is that you can make deductions on your tax return. Consider the following deductions you can make on your return:
Mortgage interest
Depreciation
Management costs
You can also gain favorable tax benefits if you manage your property as an entity (i.e. LLC).
Attracting Worthy Tenants
To generate a reliable income, you must attract the right tenants. To find tenants who will consistently pay their rent on time, research their credit score and income history.
Also, follow up on references from previous landlords to learn about red flags. For instance, you could end up with a destructive tenant who may not take care of the unit.
Property Managers
Property management companies can screen tenants on your behalf. Property managers add to your overhead, but they can handle the daily operations for you, especially if you own multiple properties or units. Property managers can maintain the units and deal with tenants directly.
Example: If a plumbing issue arises in a single-family home, the tenant will deal with the property manager instead of you.
Without a property manager, you must fulfill the maintenance requests, which can be a daunting task. Rather, property managers can complete the repairs on their own or hire a contractor. They will let you know about the problem and costs. From there, they will proceed with the requested repairs upon your approval.
In addition to maintenance requests, they also handle landscaping and pest control. Overall, they keep your grounds in pristine condition, helping you attract more tenants in the process.
Increased Competition
The number of renters has increased in recent years. With higher demand comes additional landlords entering the market. Also, the rental property industry is seeing the rise of corporate landlords who have enough funds to invest heavily in their properties.
As a result, landlords must do more to fill their units. In many cases, it’s not enough to offer a living space alone. You must also offer quality amenities to gain tenants. The type of amenities offered depends on the property type.
Example: If you own an apartment complex, you can add a fitness center or gym as a feature. You can also add certain conveniences, such as on-site laundromats.
Consider the following perks that can attract more tenants:
Flexible Pet Policy: You can get more tenants by allowing pets. You can charge an additional deposit in case the pet damages the property.
Outdoor Space: Pet owners also love outdoor spaces. An outdoor space can be in the form of a backyard, pool, or patio area. This amenity will attract renters with families.
Security and Safety: You can add outdoor lights or security alarms to your properties to make tenants feel safer.
Smart Features: Smart features can include charging stations or talking technology. Talking technology responds to the voice commands of humans. This is a great option if you want to attract millennial renters.
Above all, your unit must be clean and well-maintained. Part of your job entails upgrading the units when necessary. Your house or apartment complex must have a clean appearance that will impress potential renters. A rundown or outdated structure can make them look elsewhere.
Also, you must keep up with the competition. To be an effective owner, research what your competitors are doing, and find out what your fellow landlords are offering and not offering. Add unique features to your properties to stand out from the competition.
A Day in the Life of a Landlord: Is It Worth the Hassle?
A day in the life of a landlord can be challenging, especially if you’re functioning as the property manager. Furthermore, landlords must deal with ongoing maintenance and abrupt repairs that can be costly.
However, landlords can hire property managers to handle repairs and deal with tenants. Overall, property owners benefit from a passive income, and a guaranteed income can give you additional time to pursue other jobs or passions.
Are you a new landlord who needs to learn about leases? Read our article about lease requirements to learn how to draft a good lease agreement.
Posted 12:18 PM