Becoming a Landlord
If owning rental properties is something you are interested in or thrust into, you need to be prepared to take on the duties of a good landlord. Maybe you just purchased your first rental unit, inherited a property or are moving but do not intend plan to sell your house. You need to understand what you are getting yourself into before you worry about getting your property rented.
Some actions landlords need to take occur every month. Some once a year. Some only rarely or never if you are lucky. But each month you need to be prepared for all of them. So in general, what should a landlord be prepared to do each month?
The first thing is an obvious one. The landlord needs to collect and deposit rents. What may not be quite so obvious is what this may entail. Collecting rent can mean a trip to the property or a trip to the mailbox followed by a trip to your bank to make a deposit. That could also mean sending a letter to non-paying tenants or initiating a court action.
A landlord should also be prepared to spend time on the property each month. You may want to inspect the property to ensure that there are no maintenance concerns and that your tenants are living up to the terms of their rental agreement. You will want to be sure that any maintenance, landscaping, painting, repair or other services you authorized are being performed. Move in or move out inspections may need to be conducted. You may need to show the rental unit to an interested tenant. The amount of time spent on the property will vary widely, but you will need to be available if you plan to do it all yourself.
Income and expenses need to be recorded. How and when you do that is a matter of personal preference but it cannot be avoided. You may use manila folders, a spreadsheet or property management software. However you choose to do it, it needs to get done.
A landlord also has to keep up with paperwork. Written notices, lease agreements, receipts and any other correspondence or documentation related to the rental property all have to be prepared, copied and filed for record keeping and bookkeeping purposes.
Most of all, a landlord needs to be available. A landlord’s biggest asset is time. Time to spend screening tenants, taking care of the property, tending to accounting or other administrative duties and being available in case of emergencies.
While being a landlord can be lucrative and financially rewarding, becoming a landlord is not like winning the lottery. It takes work, dedication and attention to detail. If you have multiple units to take care of or if you are not going to be located near your rental, it may make sense to hire a property management company to take care of the day to day operations. If you do decide to do it yourself make sure you know what is involved first.
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