Are you considering becoming a landlord? It can be a very profitable endeavor, but it’s not without its share of challenges.
In this post, we’ll take a look at some of the pros and cons of managing your own rental property. We’ll help you decide if it’s right for you. So, are you ready to become a landlord? Let’s get started!
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Pros and cons of managing your own rental property
Managing your own rental property can be a very rewarding experience. You have the potential to save a lot of money, and you get to be in charge. But it’s not all rainbows and butterflies. There are some challenges that come along with being a DIY landlord.
Here are some things to consider before you decide to self-manage your rental property:
- Complete control over your property
- Save money by not having to pay for a property management company
- Can be more flexible with tenants, since you don’t have to go through a third party
- Have the ability to screen tenants yourself
- Build a good relationship with your tenants
- It can be time-consuming
- You may not have the expertise that a professional property management company would have
- May have to deal with difficult tenants
- You may have to deal with maintenance and repair issues
- May have to deal with legal issues
So, those are some things to consider before you decide to self-manage your rental property. It’s not an easy decision, but it’s one that you need to make carefully. Weigh the pros and cons and decide what’s best for you.
The skills you need to be a successful DIY landlord
Not every landlord is cut out to be a DIY landlord. It takes a special type of person to be successful at managing their own rental property.
Here are some of the most important skills you need to when managing your own rental property:
Dealing with tenants can be trying at times. You need to have patience to deal with the good and the bad.
Keeping track of rent payments, maintenance requests, and other paperwork can be daunting. You need to be organized to stay on top of everything.
You need to be able to communicate well with your tenants. This includes being able to listen to their concerns and address them in a timely manner.
When something goes wrong, you need to be able to think on your feet and find a solution.
Things will come up that you didn’t plan for. You need to be flexible in order to deal with the unexpected.
If you have these skills, then managing your own rental property may be right for you. But if not, it’s OK to admit that it’s not for you. There’s nothing wrong with using a professional property management company. Be sure to think things through before you decide to self-manage. And if you do decide to go it alone, make sure you have the skills necessary to be successful.
Potential pitfalls of managing your own rental property
Write about some of the potential pitfalls and drawbacks landlords should be aware of when they manage their own rental property.
There are a few potential pitfalls that landlords should be aware of when managing their own rental property:
1. Not screening tenants properly
When you’re managing your own rental property, it’s important that you take the time to screen your tenants properly. This includes running a credit check, criminal background check, and contacting their previous landlords. If you don’t screen your tenants properly, you could end up with someone who doesn’t pay rent on time or causes damage to your property.
2. Not being prepared for maintenance and repair issues
Maintenance and repair issues are inevitable when you’re a landlord. You need to be prepared to deal with them in a timely manner. This includes having a emergency fund set aside for unexpected repairs.
3. Not knowing the landlord-tenant laws
Each state has different laws that landlords need to follow. If you’re managing your own rental property, it’s important that you know these laws inside and out. This will help you avoid any legal problems down the road.
4. Getting attached to your tenants
It’s important to remember that your tenants are not your friends. You need to maintain a professional relationship with them. This can be difficult to do if you get too attached to them.
These are just a few of the potential pitfalls of managing your own rental property. Be sure to research thoroughly before you decide to self-manage your property.
How to screen tenants when you’re the landlord
When you’re managing your own rental property, one of the most important things you need to do is screen your tenants properly. This includes running a credit check, criminal background check, and contacting their previous landlords.
Here’s a step-by-step guide to screening your tenants:
- Get a tenant application form from your state’s landlord association or create your own.
- Have each prospective tenant fill out the application form.
- Run a credit check on each prospective tenant. You can get this information from the three major credit reporting agencies: Experian, TransUnion, and Equifax.
- Contact the prospective tenant’s previous landlords and ask about their rental history.
- Conduct a criminal background check on each prospective tenant.
- Make your decision and let the prospective tenant know if they’ve been approved or not.
Screening your tenants is important because it helps you weed out the bad apples. By taking the time to screen your tenants properly, you can avoid problems down the road.
How to handle maintenance and repairs managing your own rental property
Maintenance and repairs are inevitable when you’re a landlord. But there are some benefits to doing your own maintenance and repairs:
- You’ll save money. Hiring a property management company can be expensive. If you’re handy, you can do many of the repairs yourself and save yourself some money.
- You’ll have more control over the repairs. When you hire a property management company, they might not make the repairs in the way that you want them to be done. If you do the repairs yourself, you can make sure they’re done the way that you want.
- You can build a relationship with your tenants. When you’re involved in the repair process, it gives you a chance to build a relationship with your tenants. This can be beneficial if there are any problems down the road.
Of course, there are some potential downside to doing your own repairs:
- It takes time. Doing your own repairs can take up a lot of your time. If you’re not prepared for this, it can be frustrating.
- You might not be able to do the repair correctly. If you’re not handy, you might not be able to do the repair correctly. This could end up costing you more money in the long run.
- It’s difficult to keep up with repairs. If you have multiple units, it can be difficult to keep up with all of the repairs that need to be done. This can be overwhelming and cause you to fall behind.
One of the best ways to find reliable people to do maintenance and repairs on your rental property is to ask for referrals from other landlords. You can also search online for reviews of contractors in your area. Once you’ve found a few contractors that you’re interested in, be sure to check their references and make sure they’re licensed and insured.
Another way to find reliable contractors is to use a service like HomeAdvisor or Angie’s List (now known as Angi). These services pre-screen contractors and provide customer reviews. This can take some of the legwork out of finding a contractor.
When you’re looking for someone to do maintenance or repairs on your rental property, it’s important to find someone who is reliable and trustworthy. By taking the time to do your research, you can find a contractor who will meet your needs.
Legal considerations of self-managing your rental property
As a landlord, there are a number of legal considerations that you need to be aware of. These include:
Each state has its own landlord-tenant laws that govern the relationship between landlords and tenants. It’s important to familiarize yourself with these laws so that you know your rights and responsibilities. You can find out more about your state’s landlord-tenant laws by contacting your state’s housing department or searching online.
A lease is a legally binding contract between a landlord and tenant. It outlines the terms of the rental agreement, such as the length of the lease, the rent amount, and the rules of the rental property. It’s important to have a written lease so that there is no confusion about the terms of the agreement.
A security deposit is a sum of money that is paid by the tenant at the start of the tenancy. The landlord holds onto this money in case there are any damages to the rental property. Landlords are required to follow state laws when it comes to security deposits, so it’s important to familiarize yourself with these laws before you collect a security deposit from your tenants.
There are a number of other legal considerations that landlords need to be aware of, such as fair housing laws and lead disclosure laws. The best way to learn about these laws is to contact your state’s housing department or search online.
Another important consideration for landlords is insurance. Landlord insurance covers the property and the landlord in case of any damages or liability claims. This type of insurance is typically very affordable, and it can give you peace of mind knowing that you’re protected in case anything happens.
Self-managing your rental property can be a great way to save money, but it’s important to understand all of the pros and cons before making a decision. If you’re not familiar with the legal considerations, it’s best to consult with an attorney or housing department. And, if you’re not comfortable with repairs or maintenance, it’s best to hire a contractor.
By taking the time to understand all of the implications of self-managing your rental property, you can make an informed decision about what’s best for you.