While real estate investing is a great line of business to get into in order to make copious piles of money there are a few things to consider before jumping into the fray. This is particularly true if you are considering going the route of a rental property owner. There are all kinds of reasons that this is a good solid investment for most that are interested in investing in the real estate business however, it doesn’t come without a few drawbacks, not all of which are financial. It would be wise to consider these things however before you buy your first rental property.
First of all, if you own rental properties and elect to manage them yourself, which is probably wise unless your first property is a multiple rental unit, you will quickly discover that your life is no longer your own. You are literally on call 24 hours a day 7 days a week to handle problems that may arise from pipes bursting, heating going out, electric issues, noxious fumes, leaky roofs and window sills and countless other complaints that may erupt at odd hours of the day or night. Your tenants will have your phone number and expect you to always take their calls.
Second, you have to play the role of Mr. or Mrs. Mean every month when the rent is due. This is probably the least tasteful task of owning rental properties for many rental property owners and one reason that many resort to the services of a property management agency above all other reasons. You will hear all manner of sob stories in your role as landlord but you need to treat this like the business even the things about your business you don’t like such as rent collecting and, when necessary, eviction proceedings.
Third, the constant need for upkeep and repair is often daunting to rental property owners. It’s a sad truth that people do not treat rental properties with the respect that they would treat a home of their own. For this reason you almost always need to paint and replace carpeting, at the very least in between tenants. This takes works and time not to mention the fact that the time that is spent painting and replacing the flooring is time that the property is going to be empty of tenants and not bringing in any income.
Finally, there is the constant need to have the property occupied. As the owner of a rental property you will need to find new tenants when the old ones leave because every day the property is empty is a day you aren’t making money. You want to have the property filled as often as possible and you really want long term tenants whenever you can manage that. One way of course is by making sure that your tenants are treated well, not overcharged, and happy with their homes.
Owning rental property can be financially rewarding but it is a lot more work than many people give it credit for being in light of other careers within the real estate investment field that may require more work upfront. Rental properties require a long-term commitment to keeping the property in good working order and making it a profitable venture for many years to come. If you are considering this business and the above things are a deterrent for you it might be a good idea to obtain the services of a property manager.