Check out both sides to see what it’s like being a landlord. Is it a never-ending battle or a walk in the park?
The first time you mention real estate investing, you’ll probably get warnings about how horrible it can be being a landlord. While the advice may be well meaning, odds are good that the advisor isn’t even aware there’s more than one way to be a landlord.
There are the Trump-like kingpins who own hundreds or even thousands of rental units, and there are the mom and pop, husband and wife teams with one or two. And lots of people in between. If you talk to any of them you’ll hear all kinds of pros, cons and downright horror stories about their experiences playing the landlord game. So why is it that some of these folks rarely, if ever, have any problems, while others have nothing but horror stories? What are some of them doing right and others doing oh, so wrong?
Some smart landlords use property managers to run interference.
Some landlords don’t have horror stories because they have hired a property manager to run interference and deal with all issues great and small, and the landlord is never the wiser. They don’t get the weird calls at midnight from plumbing-impaired tenants. They just deposit their check every month and that’s the end of the story.
Others decide to take their chances.
There are a lot of landlords who’ve opted not to hire a property manager, for some very good reasons:
- Money – Landlords naturally want to save as much money as possible.
- Distrust – They feel they can manage their property better than a hired hand.
Daniil Kleyman weighs in…
So where does that leave us? Daniil Kleyman, a successful real estate investor based in Richmond, VA says that most of the landlord horror stories are from people who treat their income property like a hobby. Typically they own a modest number of rentals and have a full-time job. And because they don’t treat it like a business, things go wrong. They want it to take care of itself, so they tend to neglect it, resulting in maintenance and bad tenant issues. He goes on to say that property management is not a side job or a necessary evil, but a profit generator which accounts for cash flow, so the landlord needs to have good systems in place to avoid problems.
Whether you hire a property manager or decide to self-manage, there is a right way and a wrong way to do it. Sounds like good advice for avoiding landlord horror stories.