Over the next few weeks, I’ll be releasing a series of Insight Articles on how to be a great landlord. I’ll be talking about a lot of the essentials such as finding the right property and crunching the numbers, but I’ll also be shedding some light from the investor angle as well, that is, some tips and tricks for investor landlords.
The Fears – I know the fear of being a landlord is usually top of mind for most first-time investors. They’re afraid of:
- Late-night calls;
- Damages to the property;
- Late payments;
Simply put, there many fears when you’re thinking about being a landlord, so that’s why I wanted to take these next few weeks to shed some light on how to be a landlord, THE RIGHT WAY. Hopefully, after all of these tips and tricks, you will have the landlord confidence that you need to buy your next investment property. When that time comes, give us a call at 416-436-9436. The team at PPTO is here to support you through your landlord journey!
So without further adieu, I’ll start off this series with “Landlord Lesson # 1 – How to be a Landlord”.
Landlord, Defined – Technically speaking, once you own a property and you put a tenant in there, you become a landlord. The actual term is “lessor”. There is no license required to be a landlord (except for Waterloo) or any pre-requisite education. You just simply need to have a tenant in your property and you become a landlord. It’s as simple as that.
The Mind of a Landlord – What’s hard about being a landlord is the mindset that’s required. It’s like being a Realtor – easy to become one (that’s why there are so many out there), but it’s hard to be a good one. Being a landlord is easy, but I have yet to meet a person who has expressed to me how much they aspire to be a landlord (and all of the duties that come with it). People have told me that they can’t wait to own an investment property, but no one ever says, “I can’t wait to be a landlord!”
The difference between being a landlord and being an investor is that an investor owns an investment property to specifically leverage it for financial rewards – the why and the underlying motivator. On the other hand, a landlord deals with the operations and up-keep of the property – the how. Nobody wakes up in the morning passionate about being a landlord, and telling themselves, “I can’t wait to deal with all of these potential tenant issues.”
Timing is Everything – The other daunting thing about being a landlord is that the issues always seem to arise at a time when it causes the most problems and is the least convenient for you. You never get a 1-week notice for when the furnace breaks down, and you never get a 1-day notice for a 3AM late night call. It’s always a surprise – a bad surprise might I add.
The WHY for Landlords – So then why are there so many landlords? The act of being a landlord gives us financial wealth. It’s similar to having a job. You may like it, or you may not like it. But the real question that you should ask yourself is, “If your job doesn’t pay you for what you do, would you still do it?” This is the same for being a landlord. People choose to be a landlord because the financial rewards are that great.
If the rewards are that great, then what’s the golden nugget for how to be a great landlord? I’ll bring this up many times over the course of this Landlord Lesson series, but I would have to say that being a great landlord comes with having the right mindset. You need to have the mindset of operating your investment properties as a business. I’ll go into this in more detail over the course of the upcoming weeks, but that is truly what I think would make or break being a good landlord.
The Wrap – I always like to remind my clients that when the proverbial sh*t hits the fan, you may spend 5 hours dealing with this unwanted surprise and it’s always at the worst possible time. However, those 5 hours are probably all that you need to do for the year as a landlord to make $50,000 from your investment property. So if you find yourself in these unwanted landlord situations, ask yourself whether your time is worth $10,000 per hour. More often than not, the answer is usually yes.
If you’re ready for the rest of this Landlord Lesson series, then stay tuned for more. If you’re ready to invest in your next income property already, then make sure you contact Zhen at Zhen@PrimePropertiesTO.com to get started today.
Until Next Time, Happy Real Estate-ing,