There are many excellent reasons to become a landlord. You’ll be able to collect consistent and recurring income. You’ll earn money while your asset increases in value and your tenants pay down the rent and increase your equity.
Becoming a landlord is a great way to launch yourself into a more serious real estate investing career, if that’s something you’re interested in.
But, being a landlord isn’t for everyone. It requires a lot of specific skill sets, personality traits, and the ability to learn quickly. Being a landlord is often risky. You can find yourself making an expensive legal mistake or looking for a way out of an escalating dispute with a tenant.
Make sure you’re ready to be a landlord. If you’re not ready, that doesn’t mean you can’t invest in real estate. It simply means you need to hand over the leasing, management, and maintenance of your rental property to a qualified Coos Bay property manager.
Here’s how to know if you’re ready to be a landlord or if you’re better off partnering with a local property management expert.
Can You Treat Your Property Like a Business?
Emotional connections to properties are understandable. If you’re renting out a home you once lived in yourself, there will undoubtedly be a strong relationship with that property. However, to be an effective landlord, you need to think of this property not as your home, but as your business. You need to make decisions based on data and sound investment advice, not the way you feel. This is often more difficult than it seems for new landlords.
Can You Establish Tenant Relationships?
You’ll also need to establish and nurture positive and professional relationships with your tenant. This requires responsive communication, trust, and transparency. You want to be approachable and accessible, but you don’t want to be in your tenant’s face too much. They want privacy and they want to be left alone, generally. BUT, they want to know that you care about them and their comfort, and they need to know that you’ll be available to make repairs and replacements when necessary.
Not establishing a good relationship with your tenants could be costly. They likely won’t renew their lease agreement, which will leave you with vacancy and turnover costs. Tenants who like and respect their landlord will be more likely to pay rent on time, take care of the home, and report maintenance needs in a timely manner. They’ll respect the lease agreement and communicate openly.
The other mistake landlords can make with tenant relationships is becoming too friendly. You don’t want to blur any boundaries that might make it difficult to enforce the lease agreement or hold your residents accountable. A balance is required, and if you can create good relationships without stepping over the line, you’re probably ready to be a landlord.
Are You Financially Prepared?
When you’re about to rent out a property, it’s important to examine your current financial situation. This will help you determine if you have the funds needed to maintain the property. You’ll need money for repairs, expenses, and emergencies. Decide if you have the financial stability to withstand vacancies, late payments, and unexpected costs.
Before you decide to be a landlord, create a budget plan to maintain the property and calculate the expenses for the short and long term.
Are You Aware of Oregon’s Rental Laws?
Oregon has some of the strictest tenant protections in the country. You’ll need to make sure you understand the legal requirements of renting out a home before you become a landlord, otherwise you’re putting yourself and your property at risk.
As a landlord, it’s important to follow federal, state, and local landlord-tenant laws. Failing to comply with these laws can lead to costly lawsuits. Read up on the laws governing tenant screening, rent control, security deposits, and fair housing. It’s important to know your legal responsibilities and obligations as a landlord to ensure that you’re prepared for anything that comes your way.
Are You Comfortable with Your Responsibilities as a Landlord?
Being a landlord requires you to do more than just collect rent and place tenants. You’ll need to respond quickly to maintenance and repair requests, handle tenant issues, and ensure that your rental property is safe, clean, and in good condition. You’ll have to understand how to screen tenants, how to manage your accounting, and what you should do when a lease renewal date approaches.
If you’re not willing or able to meet these demands, it’s best to hold off on investing in rental properties or to work with a Coos Bay property manager.
Can You Plan for Emergencies?
Being a landlord comes with its fair share of unexpected situations such as break-ins or property damage. There might be a tenant who breaks their lease without telling you, and leaves without warning. A roof could need to be replaced or a sewer line could back up.
Ask yourself if you can handle such scenarios. Landlords need to be patient and unflappable. You’ll need to have insurance and reserve funds set aside for major expenses such as repairs, replacements, and renovation. Emergencies can happen at any time, and it’s important to have a plan in place for unexpected situations. Create an emergency plan that includes contact information for utility companies, contractors, and emergency services. Make sure that your tenants know where to go and who to call in the event of an emergency and how to follow the procedures you’ve established.
Most importantly, make sure you’re available to respond to emergencies. This is part of being a landlord.
Investing in a rental property can be a great way to create long-term wealth, but it also requires significant commitment. If you’re confident that you can handle the responsibilities of being a landlord, you should dive right in. If you know you’d like to rent out property, but you feel you can be more successful and profitable with the help of a Coos Bay property manager, we would love to talk with you. Contact us at Oregon Bay Properties.
