Landlords are property owners who rent property to one or more tenants. Some landlords rent physical plots of land. For example, a person who owns a plot of land could rent a parking space for a recreational vehicle (RV), enabling the owner to secure their RV when they aren’t using it. Landlords may also rent apartments and houses.
Becoming a landlord may seem like an appealing way to profit from a long-term real estate investment. Landlords can cover their mortgage and maintenance costs and generate revenue when they sell their rental properties. Still, there are potential drawbacks, and there are several factors to consider before you decide to become a landlord.
House hacking is a great option.
Renting property is about more than collecting checks from tenants. You may find yourself addressing conflicts between tenants if you rent multiple units or dealing with complaints from neighbors about your tenants. You’re also responsible for property maintenance and may find yourself dealing with late-night and weekend calls about malfunctioning appliances or other issues.
House hacking alleviates some of the challenges of renting to tenants, particularly if you plan to manage your property yourself. The house hacking real estate option involves buying a property with multiple units. You could buy a triplex, live in one unit, and rent the other units to tenants. You could also purchase an apartment building or a house with multiple apartments. Again, you’d occupy one unit and rent the other units.
House hacking is an affordable entry-level option for new property owners entering the real estate market. Your proximity to your tenants can dissuade problematic behavior, such as noise bylaw violations. You also won’t have to worry about commuting from your residence when tenants have maintenance issues. Since you live on-site, you’ll likely be aware of external maintenance issues before tenants or neighbors complain, enabling you to address problems promptly.
You’ll pay for repairs and upgrades.
You might opt to buy a fixer-upper and upgrade the units before renting to tenants. Maintenance issues can also arise, and you may need to make upgrades to address tenant concerns.
Installing a new shower can eliminate odors and give a bathroom a crucial facelift. Turn to bathroom installation experts when it’s time for a shower replacement. Installation experts can convert the bathtub to a shower. Your bathroom remodelers can also install a new shower surround, preventing moisture from seeping behind the surround and damaging your walls.
Bathroom accidents cause hundreds of thousands of accidents each year and severe injuries from people falling against hard porcelain fixtures. Converting bathtubs to showers can reduce the risk of falls because tenants won’t have to step over the side of the bathtub. Installing materials with antimicrobial surface technology also prevents microorganisms, such as mold, from growing in your bathrooms, protecting your tenants’ health.
Property managers are an option for hands-free landlords.
You don’t have to address tenant complaints or maintenance issues if you hire a property manager. Perhaps you have a full-time job or travel frequently for work. Your property manager shows the property to potential renters, screens applicants, collects rent, and schedules repairs. They may also pay bills and maintain financial records. You’ll increase your costs by paying their salary, but your property manager handles the day-to-day tasks on-site and allows you to focus on other priorities.
You’ll benefit from legal guidance.
Real estate attorneys prepare and review rental agreements. Seeking input from an attorney ensures you protect your legal rights and understand your tenants’ legal rights. Your attorney can prevent you from making costly mistakes or experiencing legal issues if you evict a tenant.
You must maintain your rental properties and address tenant concerns. You can use house hacking to keep an eye on tenants or hire a property manager. Expect to invest in upgrades and repairs. Consult an attorney to ensure you understand your legal rights and address legal issues with renters.