Is Becoming a Landlord Right for Me?fjpinvestment
If you are thinking of investing in buy-to-let property and becoming a landlord, there will likely be several possible motivating factors driving you. It is possible to make a decent living out of property investing as a landlord, as well as a good investment for the future. That said, being a landlord may not be a good fit for everyone. As a result, before making a commitment to becoming a landlord and all that it entails, think carefully about whether or not this sort of venture or investment is good for you. When it comes to being a landlord, it isn’t hard to get started, but it is important to think of it as a long-term investment rather than an opportunity for a quick payday.
Some important preliminary points to consider. Be sure to ask yourself a few critical questions before learning more about what makes a great landlord, such as:
- What marketing and management strategy do you have in place for your property investment?
- Do you intend to handle the day-to-day administration of the business side of things alone, or are you open to bringing in specialists who can assist in smoothing the route to developing a profitable property portfolio?
- What are your plans for the day-to-day operations of the business?
Whilst you may be saying yes to the above, to be on the safe side, let’s look at some characteristics that we believe turn good landlords into great landlords. While property investing holds enormous potential and many landlords make a success of it, an important aspect of achieving this is the individual who will be doing the investing.
How well organised are you?
Managing a tenancy involves a plethora of tasks and concerns, all of which must be organised and prioritised by the landlord. If you want to be an active property manager, you’ll need to be able to set priorities, which is especially important if you’re also pursuing another career on top.
Problems and jobs tend to arrive in waves, so being able to assess what needs to be done right at once against what can wait is essential. In case of an emergency, like water leaking from the ceiling, you must be able to change your plans and be as flexible as you need to be.
Have you ever been in charge of your own company?
Despite the fact that this isn’t required to have managed your own business previously, it may be quite beneficial. The day-to-day management of a profitable property portfolio may be made much easier if you have a basic understanding of how businesses operate. If you’ve ever run your own business, you’ve probably learned a thing or two about how to effectively manage both your own and other people’s time. If you haven’t run a business before or been in some kind of management role, it will help enormously to develop a mindset that property investing is actually a business and is best treated as such.
Employing others in areas like bookkeeping or maintenance, having management skills and a business awareness mindset will help you in leaps and bounds. Managing others and knowing who is doing what is essential if you want to keep your company running smoothly.
How much do you like interacting with people?
While some landlords find they don’t have much contact with others, other landlords find that they have to engage with many people in order to maintain their property portfolio. Actually, managing a property portfolio might be considered a “people business,” so you need to be comfortable dealing with others if you plan to be a landlord. Indeed, the better your people and communication skills, the more likely this will translate into a more profitable business.
Owners of rental properties must establish relationships with not just the renters who live in their properties but also with the people who will assist them in performing tasks that they do not really enjoy, or perhaps can’t do themselves. There is a universal truth about human nature: people will respond to others in a way that reflects what they think about them. When it comes to running a buy-to-let business, engaging with other people is essential since people are more willing to put themselves out for someone they like.
What are you like under pressure?
When things don’t go to plan, are you a calm person or do you get agitated easily? With the responsibility of being a landlord comes unexpected challenges that need a calm demeanour to deal with. You can be sure that your ability to maintain composure will be put to the test at some point. When you least expect it, you could be faced with a challenge that will test your limits.
You may be able to deal with the issues at hand, but will you be able to do it while maintaining your composure and with a smile? Or is it possible that you’re more prone to becoming upset and even angry about little inconveniences? To avoid unnecessary stress in the future, it’s important to know yourself and to be honest about how you anticipate you’ll respond.
Are your communication skills up to par?
If you want to succeed as a landlord, you need to be able to communicate effectively. A landlord’s day-to-day tasks include responding to a slew of emails and phone calls. Will you be fine with his? While many consider themselves good in this department, the truth of the matter is that many are not.
Get an honest assessment of your communication abilities from individuals who are close to you. It’s a good idea to start with co-workers, but make sure you only ask people you know and trust to give you an honest answer, rather than one you think you’ll like.
Fortunately, communication is a skill that can be taught and picked up quickly through practice. So, don’t be discouraged if you don’t get a positive response from people you ask. This is a good place to start looking for self-improvement. It could be something as simple as not reacting right away to something, but waiting a little until you have a clearer mind to respond.
What are you like with handling money?
In spite of the fact that many people believe they are pretty good with money, it is still crucial to know whether or not they are financially sound before they take the first step into the world of buy-to-let investing. Embarking on becoming a landlord while not being financially sound will likely make things much harder for you to succeed.
For example, how financially prepared are you for the unexpected? Do you have an emergency fund to cover such eventualities? Do you have a sound credit rating score? Is it possible to make your mortgage payments if the home is vacant for a longer period of time than expected? Are you able to hire tradespeople at a moment’s notice? Before buying a new investment property, you should carefully think about all of these things, as well as others.
Consideration of all of these factors may seem a little overwhelming, but it’s critical that you go into a significant commitment like this (in terms of both time and money) with full awareness of what is involved in becoming a landlord. And remember, to be a successful landlord, you do not necessarily have to be 100% on all of the above. I can guarantee you that no one is!
And lest we forget, it’s possible to outsource a lot of work, and indeed, some believe that it should be done, even if you are fully capable of doing it yourself. It’s true that they will cost you money and bite into your profits a little, but you should also keep in mind the time you’ll spend if you do them yourself. There are greater uses for that time. For example, you could use that time better by doing some research and starting the process of buying another property to grow your buy-to-let business.
- Be honest with yourself and ask others to do the same
- Know your strengths and weaknesses
- Know your figures and be aware of your financial situation
- Evaluate your business and people management skills
- Decide how much hands-on you want to be and hire help for the rest