It is getting tougher to be a small-time landlord

[Jeff S.]

I see the day coming when you can't afford to manage a small portfolio of rental properties.

The tough part for me has been getting maintenance done for little stuff. I have had so many handymen over the years, some licensed, most not. You keep hearing about what a threat it is to use non-licensed $20 an hour guys who might come and repair a wall a tenant's kid knocked a hole in. The sheetrock professional can't afford to come out for a job worth $25. It is not like the GC's of the world are getting robbed because of the unlicensed handyman. The guys (sorry ladies not come across any Jill of all trades ladies) I talk to won't bother with a small job. Just had a licensed guy say I couldn't afford to pay him what he wanted for a little project I proposed; he, and rightly so, needs a good profit to show up and the little stuff doesn't have that potential.

Having several places is ideal for people that want to have additional retirement resources but don't plan on having rentals be their business... but lots of PM's in my area won't touch single family and don't want small portfolios. My experience with property managers was one that would quickly put the small guy out of business.

I spend a considerable amount of time and money staying educated because the tenant/ landlord laws are a land mine for unsuspecting and uninformed small landlords. The most dangerous situation is the landlord that owns 1 property.

If you are midway between residential and commercial (5 properties) the insurance companies start considering you a risk and will only cover you with more expensive commercial policies that require you to go to LLC's while LLC's might not be appropriate for someone getting new mortgages and has existing mortgages.

What is the saying-go big or go home? Don't want either but...

[Mike F.]

Well, in regard to the repairs and such, I'd simply forfeit the idea that you need to make repairs such as a hole kicked in a wall by your tenant's kid for $25, and realize that whatever it takes to repair it, it doesn't matter since you would be passing the cost on to your tenant. I'd get out of the $25 mindset and realize it will be $300 and bill the tenant. Might make them manage their kids a bit closer once they get tired of paying for their tantrums. The reality of the market rates are the reality and your tenant should be the one lamenting the high cost of repair labor not you.