Are You Ready to Become a Landlord?

Everyone wants to earn that sweet rental income, but no one wants to be a landlord. There are many ways to achieve this, like Real Estate Investment Trusts, but why not become a landlord?

Becoming a landlord has its own challenges; however, you will learn a lot about people and human nature. If you stick with it, you’ll build toughness and kindness towards the world. Let’s begin. 

What is a landlord? A landlord rents a home or a room to someone else. The person renting the space is a tenant. I have an early article on my blog where I explore landlordship. 

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Where can I study to become a landlord? The best way to prepare yourself to become a landlord is to understand the rules. 

“The Book on Managing Rental Properties” is your best resource for getting started as a landlord. This book will help you prepare the paperwork, home, and mindset for your new journey. 

What is the mindset of being a landlord? It’s a business; all day, every day—100%. If you cannot separate being a human from conducting business, landlording is not for you. Here are a few things I have learned from ten years of being a landlord:

1. Nobody loves your stuff as much as you do, so don’t expect them to care. 
2. Never give them a break on the rent, or let them pay late without penalty.
3. Never listen to their issues or problems, and make decisions based on them.
4. The best reward for good tenants is lower rent increases.
5. Always raise the rent yearly, even if it is a small amount.
6. Prepare for sob stories, and never give in to the drama.

Why are you so cold? Being a landlord is not about being cold or mean; it’s about truth. We live in a society that wants you to “care” about others. 

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However, nobody cares about you. As you start building your real estate portfolio, you’ll notice one thing in particular—owning a home is expensive. 

Your insurance will creep up yearly, and your property taxes will rise with home values. You’ll need to replace the roof, carpet, or air conditioner.

Plus, your tenants are hard on your home, appliances, and amenities. Trust me; your tenants will not pay a dime when they can make you pay.

Then the rent increase happens. However, the sob stories will come when it’s time to raise the rent. Remember, your tenant didn’t take it upon themselves to paint your home, improve the landscaping, or put in a fence. They didn’t do you any favors, but they will want you to keep the rent low.

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Ask yourself a question—who will be a better steward of the money? If you don’t increase the rent for a couple of years, what will your tenants do with the extra cash?

Take care of yourself first. I see it all the time. A landlord doesn’t want the conflict of raising the rent, and the tenants take advantage of the situation. 

The tenants start driving nicer cars or eating out more. Meanwhile, you are losing money on the rental property and want to sell the home. 

If you don’t take care of yourself first, it will not help the tenant in the long run. The new landlord will immediately raise rents during the next contract negotiation. 

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Landlording is about adding value. Being a landlord is about adding value to the world. You are providing human beings shelter for a fee.

Tenants think they are doing you a favor, but you are assuming all the risk. They can destroy whatever they want, and you will be on the hook to repair it.

Tenants will gaslight you into feeling like a monster, but you are running a business. Most people think YOU should understand and empathize with THEIR issues. Sure.

However, I don’t make decisions based on emotions. If you are not good with logic and business, you’ll have a tough time as a landlord.

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The biggest target. The truth is that you are a massive target as a homeowner. There is almost no positive news about owning a home. Here are some people looking for handouts:

1. The tax collector wants to raise their taxes every year.
2. The insurance people want you to pay for last year’s hurricane.
3. The bug spray and termite people want their pound of cash.
4. Solar panel people will come around every year.
5. Concrete, fence, pool, landscape, etc. will cost you an arm and a leg.
6. Fiber, cable, and satellite will cost you to install/uninstall new services.

The list goes on and on. The more houses you have (I own three), the more these things affect your bottom line.

It’s your duty to pass these costs on to the tenant. If you don’t, you’ll be underwater and lose all of your homes. Simply put, this is a business with actual costs. Either you pay them, or your tenant pays them.

There is kindness involved as well. Most of your tenants will be 100% about themselves. Treat them as such. However, you will have a few good tenants.

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They will take care of your home better than you. They will perform work first, then ask if you can reimburse them. If you don’t, they don’t take it personally. 

If you find a good tenant, let them know they are a good tenant. You’ll still have to raise the rent, but perhaps only at the level of your increasing costs.

Be honest and transparent with your good tenants, and they will understand. You can also work out different ways to keep them in the house. For instance, maybe not a pay increase this year, but a double increase next year.

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Conclusion. Dealing with tenants is the worst part of running a rental property. If you think that property managers are better, you’ll learn soon. 

However, you will find good tenants over time. Since your costs constantly increase, you will also need to increase their rent. You can show kindness for good behavior. 

However, needy or crappy tenants need to pay for their cost to your mental health. They love to terrorize your time with low-hanging complaints.

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I may make it sound bad, but becoming a landlord allows you to see the world in its true form. Most people will straddle the line of black and white when it comes to landlords paying for repairs and upgrades.

However, when it is time for a rent increase, they want to throw emotions and sob stories to make the line gray and murky. 

As a landlord, you must navigate this rocky path with 90% logic and 10% emotion. Sure, people may consider you cold, but YOU are doing them a favor by absorbing most of the risk involved with housing. 

The best way to gain experience as a landlord is by renting rooms. If you can handle a roommate, working with a rental property is much easier (but more costs arise). Landlording is a good lesson in life, business, and dealing with others. Good luck!

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing