Are you capitalized enough to be a landlord? Can you really afford the true cost of a bad tenant?
Far too many ‘investors’ neglect one of the main things that will put them out of business. Their customers. Like it or not, no matter how genuine a tenant sounds in the showing, when they are behind on their rent, they can be as mean as a snake.
I see it all the time: A prospective landlord looks at the numbers and says, “Rent will be $1,000 a month. My payments will only be $800; I can pocket the rest.”
If you are any type of investor, at least one who reads here, you know that this is a losing proposition. There is $200 worth of cash flow — before expenses. After expenses of 50%, there is a negative cash flow of $300. And they are even managing the property for free.
But to the naïve investor, on the surface it looks OK: $200 a month in your pocket. And that is if you get a renter, if you get a renter who pays, if you get a renter who doesn’t damage the place, and if you do not have any vacancy.
Oh Lord yes does this ring a bell. Please folks have 10 or 20k set aside incase you have issues, vacancies, damage , evictions, you must have money or access to it. Do not be struggling and try to become a landlord, it doesn’t work. I sold a place to someone who was broke and he rents it and I live his nightmare monthly, hes 2 months behind and he has issues with other properties, he’s not cut out for being a landlord. It’s for people who can handle stress and aren’t afraid to work on their own property even at a minimal level and have money in reserve ! Thanks for the share. AGREE ! ! ! ! PS I’ve had well over 40 properties and some multi units and never ever hired management, if you want to make profit you can learn how to fix simple things on you tube and trust me it will save you a ton. Have a great day
You are always a wealth of knowledge! Without capital, it is hard to make it as a landlord. Sometimes, just a bit of extra cash is the difference between going broke and being a millionaire.
I had tenants that decided to use the stove to melt wax. It was so stinky every time we turn the stove on that I have to throw it out. It definitely not that easy. Just have to find value so your start up cost doesn’t eat that much into your profit.
Tenants will fine all sorts of ways to use appliances for what they are not built for. Since they assume that they do not have to pay, they do not care. Good landlords know that all damages can be deducted from the security deposit.
Better tenants generally cause much lass damage.