How to Determine if You Are Ready to Become a Landlord
The rental market is a valuable market to tap into, especially as it seems to be showing no signs of slowing down. Based on data from World Atlas, more and more people in the world are renting. In countries like Switzerland, Hong Kong, and Germany, around half of the whole population are renters.
That said, being a landlord may be lucrative but it also comes with a slew of responsibilities and long-term considerations. If you are investing in properties for the sole purpose of leasing them out, you would become both a property manager and a landlord. Before you take the plunge, there are a few questions you should ask yourself.
Do you have the financial capacity to maintain these investments?
At the end of the day, you still have to handle municipal fees for your properties, as well as any taxes, mortgages, and bills. Think about whether you can keep paying for the property in the event that a tenant or two misses the deadline for their rent at some point. Can you afford repairs that may suddenly be needed if a natural disaster or a similarly damaging event occurs?
Make sure you’re not putting yourself into the red and financial difficulty by becoming a landlord
Can you oversee the upkeep of the property?
The security, safety, and maintenance of the property falls on you. Even though the tenants have a responsibility to the property, the general upkeep is reliant on the landlord. One area you must keep on top of is the properties safety, as any incident will likely hit you legally. One area to pay particular attention to is gas safety, especially as Germany is the largest consumer of natural gas in Europe. This means you should conduct annual gas checks. According to an article on gas safety checks by HomeServe, these entail the ongoing maintenance of gas fittings and appliances by engineers, which should be hired and paid for by the landlord. Conducting regular safety checks, gas or otherwise, is a responsibility you have to prioritise for the safety of your property and your tenants.
Are you ready to handle various occupants and their concerns?
You don’t necessarily have to be the bubbliest of brooks, but you still need to have good interpersonal skills since you will be interacting with and overseeing a wide array of people. Tenants can come from completely different backgrounds from each other, and even if you screen them before signing any leases, you will still have to learn to manage the quirks that crop up during their stay. On top of that, you should consider whether you are capable of answering to all of their concerns mentally. It’s quite a burden to carry when you’re already trying to oversee the physical aspects of the space, especially as you take on more properties.
Can you manage your time with all the possible emergencies and obligations?
Time management is a crucial aspect of being a successful landlord. In a guide for rental property management strategies by The Balance, it is noted how a good tactic is figuring out which tasks you can do yourself and which ones you can outsource. This way, you are productively using your time and still setting aside enough personal hours without sacrificing the work that needs to be done.
If you are hiring any other personnel to oversee certain aspects of your property, make sure they are more knowledgeable than you in their respective field.
Do you have a healthy balance of emotions and objectivity?
This one is important, because a landlord cannot be swayed fully by emotions. This goes on both sides of the spectrum. You cannot harass or discriminate your tenants, but at the same time, you cannot be so emotionally involved that you can’t make practical decisions for what is still a business.
If you are satisfied with your personal answers to these questions, then all that remains is to find a suitable property to rent out. If you want to find the perfect space for this kind of endeavour, you can check out our guide to a dream home by Milos and Danijela Nakovski.