Becoming a Landlord Comments13 Comments

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If you’re thinking of taking the plunge into real estate and becoming a landlord, then there are a few steps you need to go through first, and several things you need to consider.

More Than Rent Collecting

It’s not all about sitting back and watching the pennies pile up. There is a lot of work that goes into being a landlord.

Finding the Right Property

If you know who you want to rent to, it helps to narrow down the location and type of house you’re looking for. If, for example, you’re thinking of renting to students, then you’ll need a property close to where they’re studying, as well as having many bedrooms and a big communal area. They are also likely to need the house fully furnished too. If, on the other hand, you want to rent to a family, they’ll need plenty of room, but may not need as much furniture. They’re likely to want a nicer area than students might.

Furnishing the Property

Many properties are partly furnished or furnished, as you can charge a higher rent this way. If you’re planning on furnishing the property, remember that you’re not reflecting your own personality. Instead purchase furniture that allows tenants to express their own individuality. You may find it easier to purchase furniture packages, like the ones from that include everything you might need to complete your property.

Agency or DIY

If you plan on doing the landlord-ing yourself, then you need to find and veto tenants, answer any of the queries, problems or issues that your tenants might have, organise maintenance, resolve any disputes, etc. It can become more of a burden than you first anticipated. However, when things are good, it can be a very rewarding experience as you get to deal with tenants directly.
You could, alternatively, hire a property management agency and have them do everything for you. They charge a fee, and sometimes even an ongoing percentage of the rent. If you plan on employing a property management company, you should make sure that you know what is involved in the costs.

The Rules

There are laws and regulations that you must follow if you want to become a landlord.

  • The Fair Housing Laws prevent discrimination because of race, religion, sex, disability or familial status, when renting, selling and even mortgage lending.
  • You must protect your tenant’s security deposit and it must be handled in a certain way. This law differs depending on what state you’re in, so check and make sure you’re not breaking it.
  • Housing safety and health codes dictate what you must adhere to with regards to things like smoke detectors, working plumbing, etc.
  • If you need to evict a tenant then there are certain procedures you must follow.

Your Responsibility to Your Tenants

  • Ensuring the house is in a state of repair. This means making sure that the property is acceptable when tenants move in, and responding to any reports of disrepair or maintenance work in a timely manner.
  • You should also make sure that the tenants feel safe in the property, it will be their home, so ensuring security is high on your list of priorities is essential.
  • Advice renters insurance. You cannot make tenants pay for insurance, but make sure that they know it is available to them, in case of fire or flood.
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This entry was posted in Financial Advice, Real Estate, and tagged , Comments13 Comments
By : Adam | 2 Jul 2013
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13 thoughts on “Becoming a Landlord

  1. Pauline

    I rent furnished to students and most furniture were second hand. I didn’t go for the cheapest but it was at least half price from new and in just a few month I made that back in extra rent.

    1. Simon

      Pauline, I can see landlording is turning out pretty well for you :) Nice touch on buying quality second hand furnishings, frugality at its best!

  2. Canadianbudgetbinder

    If I had some rental houses I would become a landlord. My mum and dad have a few houses and they rent them all out. They are all paid for so it’s extra income for them. The hard part is finding good long-term tenants which they have for one house but the others seem to come and go every couple of years. It’s worth it though, to them.

    1. Simon

      I think finding good long-term tenants is a short term hiccup in the grand scheme of having an almost constant revenue stream. Its an inconvenience worth enduring and am pretty sure you’ll soon find the perfect match clients :)

  3. Leslie Z. Graham

    That’s so annoying because there is absolutely nothing a landlord can do besides from say, “err ok” I’ve heard that line from a few different tenants before; every time it just irks me a little bit more than the previous.

    1. Simon

      Think of them as customers and as the mantra in customer service goes, “the customer is king!” You can try to amicably resolve issues with them in a way that doesn’t leave you irked :) All the best!

  4. Tradewind Investments

    There’s a lot more involved in renting out an apartment or house than most people think. This article does a good job of expressing that. Nice post thanks!

  5. Bryce

    I’ve got two brothers who became landlords by just not selling their old house when they bought the next one. The houses were paid off, so their properties are profitable. It helps that they live relatively close to their rentals so they can more easily deal with maintenance issues. Still, I have no desire to be a landlord.

    1. Simon

      Thats a sweet way to end up a landlord, am even surprised you wouldn’t be interested in landlording…if your brother’s story is anything to go by, sounds easy and you’d have mentors :) Then again, it does come with its own headaches etc, maintenance, tenancy, dealing with unruly tenants, at the end of the day though, I think the income outweighs those minor hiccups!

  6. Brent

    I have been a real estate investor for more than a decade now. Want to know my biggest secret? Don’t be a landlord, be a real estate investor! Your time is better spent working the next deal than fixing toilets, replacing fridges and chasing down rent.

    With the exception of one property, I have professional property managers do all the “landlording” and it’s worth every single penny. I do market my properties myself but that is mostly to keep my finger on the pulse of the market I’m invested in which is well worth it.

    If you are looking to become a real estate investor, I highly recommend you run your numbers with the cost of property management included (5%-10% depending on your market). If the number work with the property manager in place and you still, for some reason, want to do the work yourself your net income will be even better.


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