Many responsibilities come with being a landlord, and you must learn a lot along the way. It requires a certain level of determination, strategy, and patience if you want to be a good landlord and make money doing so. This means that not everyone has what it takes, and that’s okay. Not every job suits every person; you wouldn’t expect someone with pyrophobia to make a good firefighter! The important thing is to learn how to tell if you’re cut out to be a landlord before becoming one.
Can You Tolerate a Certain Level of Risk?
Virtually every kind of investment has some risk, and a lot can seemingly change overnight with property investment. Property values can rise and fall, tenants may be scarce for a time, the rental market can slow down throughout the year, and you may have to get competitive with your rates. Being a landlord means you must be adaptable to some degree. Overall, investors view property investment as a safe financial avenue with mid-level risk. However, if you lose sleep over the “what-ifs” or can’t meet stressful situations with a level head, being a landlord may not be for you.
Do You Have the Funds To Handle Unforeseen Expenses?
There may be times when you must pay for expenses out of pocket, as emergencies and unforeseen expenses are simply part of the job. Ideally, you’ll have the funds to pay for expensive maintenance items to re-pipe a home, replace the HVAC system, or replace a roof. Of course, how much that will be depends on the rates in your area and your property itself, but it’s better to be safe than sorry. You don’t have to have every single penny necessary; you should at least have a deposit at the ready. Fortunately, this is something that you can change by saving up over time or handling smaller properties with fewer maintenance needs.
Are You Able To Have Difficult or Awkward Conversations?
As a landlord, you will deal with people at one point or another, even if you hire a comprehensive property management company. You may have to evict a tenant, talk about their behavior, and deal with the occasional person you don’t get along with. While you don’t necessarily have to be highly extroverted, you must know how to work with people. For example, if you own two single-family units right next to each other, and the neighboring tenants can’t seem to get along, do you know how to mediate conflict between tenants? If that seems like a nightmare, or you don’t think you can control your emotions in such a situation, you may want to reconsider being a landlord.
Do You Have the Necessary Drive and the Passion?
Asking yourself this question is the best way to tell if you’re cut out to be a landlord. You can always save money, learn about real estate investment strategies, and become someone that can confidently deal with conflict. What you can’t change is your desire and level of interest. If you have enough drive and enthusiasm, anything is possible.