The Reality of Becoming a Landlord

You have seen the signs everywhere: "Sell your house fast" " We buy houses fast!" You do some research, watch some shows, and decide Hey, why don't I get out of the rat race of a typical 9-5 job and flip houses! It's a much more challenging venture than seasoned real estate investors might lead you to believe. The amount of up-front cash you need makes you realize flipping houses isn't for you.

So then what? You decide to invest in some rental properties instead! With this comes the job of becoming a landlord. Before you make the leap, here are some issues you will face by becoming a new landlord to your tenants. You may have a dream of sitting around and doing nothing as your rental income becomes your "passive" income. This isn't always the case!

So what are some negative aspects of being a landlord?

Non-Stop Phone Calls

When you become a landlord, your phone begins to ring....and ring. Prospective tenants are calling looking to rent an apartment. Your current tenants are calling to tell you something is broken. Or that they will be late with their rent this month.. or to complain about something else. There is always someone calling. The more rental properties you have, the more your phone won't stop ringing. If you are on vacation, make sure you have a backup person that can help out with last-minute emergencies.

Being In Charge

Being a small landlord means being out on your own. No longer can you hang around complaining about your job with your co-workers. If issues arise, you no longer have a boss that you can turn too. If things need to be fixed, if tenants are angry, you are ultimately in charge and have to figure it out. This means after-hours as well. Just because it's 5 o'clock somewhere and the cocktails are flowing doesn't mean you are "off the clock."

The Upfront Work And Clogged Toilets

Being a landlord is not just about collecting rent. You have to find the right properties to buy. You have to find investors to help buy them. You have to rehab and maintain those properties. You have to find, screen, and deal with the tenants. Plus all of the other daily activities that take a lot of time and effort. Who knew you would become a handyman and have to unclog toilets at 2 am?

Endless Paperwork

The paperwork that comes with being a landlord can be overwhelming. Leases, move-in forms, move-out forms, work orders, receipts, invoices, checks, W-9s, 1099s, 1040s, 1065s, deeds, mortgages, notes, envelopes, stamps, etc., You will likely to be able to handle most of this yourself, but as you grow, you will need help! Consider getting an assistant or local intern that is interested in real estate.

Constant Negotiation

Applicants want to negotiate rental criteria. Property owners want to negotiate prices. Tenants want to negotiate the rules. Being a landlord is being in a state of constant negotiation. You have to be confident and stand firm. If you can’t handle this, you are in for a rough ride!

Bad Tenants

A bad tenant may come along every once in a while. Maybe they end up losing a job or falling off the wagon...something neither they or you saw coming, but they may take it out on you and your property. They may eventually stop paying rent, or you have to force an eviction. They may perhaps destroy your property. It's hard not getting invested in their lives. Always try and do the right thing though in the end. Hopefully, this never happens to you!

I certainly do not wish to sound like a negative Debbie Downer! I just wanted to point out some realities of being a Landlord. While it's not all roses and dreams, I do not think I could ever go back to the 9 to 5 world again.