People love to hate landlords. But the simple fact is that landlords provide a needed service—perhaps the most needed amenity of all.
My partner and I have recently explored flipping raw land. One of the greatest temptations? We don’t have to hassle with all the anti-landlord regulations and restrictions raging throughout the U.S. right now. Flipping land is profitable and free from regulatory headaches or entitled tenants. Yet flipping land is effectively pushing paper, with no larger societal benefit, while landlords get vilified even as they provide a crucial service.
Vilification aside, landlords face other real challenges that most novice investors fail to grasp. If you’re thinking about becoming a landlord, keep the following in mind as the hardest aspects of being a landlord.
Turnovers: Where 90% of the Labor & Costs Lie
The overwhelming majority of the work and expenses involved in owning rental properties comes during turnovers.
It starts with walking through the unit with the outgoing tenant to determine if they caused any damage that should be deducted from their security deposit. You have to send them a detailed invoice, breaking down all security deposit deductions.
Then comes repainting, recarpeting, and other property updates, followed by advertising the vacant unit. And then open houses, showing the unit, collecting rental applications, and screening tenants. This includes pulling background checks, contacting references and prior landlords, and verifying income and employment. Fail to screen applicants well, and you end up with bad tenants (more on them shortly).
After going through all that, you have to collect the security deposit and initial rent, sign a lease agreement with all legally required disclosures, and come full circle by walking through the unit with the new tenants for a move-in condition inspection.
Woof. It’s enough to make you reconsider buying REITs and ETFs instead of putzing around with brick-and-mortar investments.
Keep reading the article “Hands Down, These Are the 5 Hardest Aspects of Being a Landlord” here:
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