So You Want To Be a Landlord?
I seem to get a few emails/calls about being a landlord, so here are some quick thoughts from me on the basics of being a landlord.
This will likely be a multi part series, so this post will focus on what skills do you need to be a landlord?
Well some landlords I know are incredibly handy people, they are great with renovations, they love working on their properties and they are you typical Mr. Fixit’s.
However, I know many landlords who’s only tool they have ever used on their property is pen and paper. Rather than investing their time in a property, they have simply hired someone to get the job done. So while being handy helps, I guess it’s not a needed skill.
How about people skills, a good landlord should have people skills! Again I know many landlords that are great people people and having the ability to relate to the tenants and get along with them has helped them tremendously.
But as I think about it, these same people have some challenges because they tend to get buddy buddy with their tenants, which rarely seems to work out well.
I also know many landlords who I would definitely put people skills at the lower end of their abilities, yet they are also tremendously successful. So maybe people skills aren’t quite as essential as it seems to be a successful landlord.
This one has to be important because first you need to be able to negotiate the best possible price on the property you’re purchasing as a rental property, then you need to negotiate with contractors to get the best prices, tenants to get the highest rates and everyone in general to get the best deals.
Except this can be a horrible plan for long term success.
The people you buy your property from resent you for being such an aggressive negotiator, the contractors won’t work for you again because they hate getting nickelled and dimed and tenants can’t wait to get out as they never feel comfortable and often feel ripped off.
In my experience it often works out far better when it’s a win/win negotiation. Where both parties get a fair deal whether it is the purchase/sale of the property, the renovation work and even the rental amounts. So maybe you don’t need to be such a fierce negotiator to make your job as a landlord easier.
Now, I’m not saying have some of the above mentioned skills won’t help you, it just appears they may not be as important as people often believe. Many people find success anyways, even if they are lacking in or more of the above areas.
So what skills are valuable to a landlord?
Organization, Patience and Humility
If you’re organized you can find records, receipts, invoices and more that are required for everything from your taxes to warranties to simply getting your books done correctly. Having systems in place to guide you along the way is one of the best methods to help with this.
If you’re patient and understand your Real Estate is a long term investment it makes being a landlord much easier. With the constantly changing market trying to time your purchases of a rental property and your selling of them can be incredibly stressful.
Rather than following the get rich quick path that so many people promote with Real Estate a longer term approach with an extended time frame (and lots of patience) will guide you through the ups and downs of the inevitable transitions through both buyers and sellers markets.
Finally humility. Have you ever run into a pompous landlord who knows everything about Real Estate? I’m willing to bet many of you have and apparently one ex-subscriber felt that way about me.
You need humility so you can go to others when you have questions or are unsure of the answers. It’s why you need a Real Estate agent who understands investment property when you’re buying. It’s why you need an accountant familiar with Real Estate if you are a landlord so you are aware of the correct deductions you can apply for and the correct processes for setting up your accounts.
It’s why you need to call plumbers, drywallers, painters and other contractors when something is beyond your scope or when it makes sense to bring a pro in to get the job right. Doing all of this takes a bit of humility at times as we often believe we can do it all.
And perhaps we can, but if we do, then we lose focus on what the property is. An investment that should be run as a business.
What do you think?