There are nearly 20 million rental homes in the country, housing over 46 million Americans.
Becoming a landlord can be lucrative when everything works in your favor. If you’re diligent about property management, you can bring in nearly $100,000 of extra income per year. On the other hand, becoming a landlord comes with its own set of problems, too.
There’s a lot of information and misinformation about rent houses by owner. In today’s post, we’ll discuss some of the most common rental myths and help you figure out if being a landlord is the right decision for you and your home.
Learning how to rent out your house can feel mysterious at times. Keep reading and you’ll have everything you need to jump at this new opportunity in 2023.
Rental Properties Are Easy Money
Owning a rental property can be a great source of side income or a full-time career, depending on the nature of your investment. Many first-time property investors go into the process thinking that they’re going to make easy money with their rental property.
The Difficulty of Being a Landlord
This just isn’t the case. Being a landlord is a lot of difficult work, especially if you decide to do it all yourself. Between looking after your tenants’ interests, your interests, and taking care of regular maintenance on the property, it’s easy to become overwhelmed by the whole thing.
To be a good landlord, you have to be organized. You need to listen to your tenants’ needs and make sure you’re putting money back into the property so it can keep creating real estate income in the long run. You also need to stay on top of rent collection so that you’ve got incoming funds in the short term.
When you add it all up, being a landlord is an all-encompassing task. It’s for this reason that so many property owners decide to hire property management instead of doing it themselves. A property manager can deal with everything your property throws at them, leaving you with the perks of rental property ownership.
Bad Tenants Are Better Than No Tenants
Every rental property owner’s worst nightmare is having vacancies in their rental units. When you don’t have renters, you’re left to cover the rental costs by yourself. You won’t make any rental income until you find yourself a tenant.
That doesn’t mean that you should accept just any tenant who applies, however. One of the biggest myths of rental houses is that having any tenant is better than having no tenants.
Good Vs. Bad Tenants
Good tenants make your life easy. They pay rent on time every single month, take good care of your property, and only bother you when something needs to be repaired. You’re left with a high-functioning investment that benefits everyone involved.
Bad tenants do just the opposite. They fail to pay rent on time, creating unneeded stress for you, having to chase them down to get paid. In the worst circumstances, they’ll disrespect your property by creating damage and disrupting other tenants and neighbors.
Avoid Evictions With Tenant Screening
When you have poor tenants, you have to take drastic measures. The eviction process is a long and difficult one that costs plenty of money and causes a lot of stress. Fortunately, you can avoid it all by screening your tenants thoroughly.
Good tenant screening practices will look carefully into an applicant’s criminal and financial background. It also involves contacting former landlords to get a sense of the tenant you’ll be getting. When done correctly, you’ll be left with the best pool of applicants in your area and your property will be kept safe.
You Can Keep Close Tabs on Your Investment
A lot of new landlords think that because they own the property, they’re entitled to keep a close eye on it. When your tenant signs a rental lease agreement, you’re giving them the right to privacy and quiet enjoyment of your rental property.
Inspection Laws
This means that you must keep a reasonable distance and avoid dropping in when they’re not expecting you. It’s a fine line between protecting your investment and violating your tenants’ rights. If you overstep, you could drive a good tenant away or even be reported to the housing authority, which could hurt your reputation as a landlord.
All of that being said, you can take action when you suspect a tenant is acting inappropriately in your rental. As long as you provide 24 hours of notice before entering the property, your tenant can’t refuse entry. You can also do drive-by inspections to keep tabs on a suspicious tenant.
You’ll Be Out Money If Your Tenant Can’t Pay
Another landlord myth is that you’ll lose money if you end up with a poor tenant who can’t pay rent. While it’s true that a bad tenant can cost more money than they bring in, you don’t have to accept their delinquency as your financial responsibility.
There are a few key resources available to help landlords in distress. One is to file an eviction and take legal action against a tenant who repeatedly misses rent. Again, evictions are time-consuming under Tennessee law, so it’s not always the best course of action.
If you decide to hire a property manager, however, they may offer eviction protection. These services cover any financial burden you incur when you’re forced to evict a tenant. The property manager will take care of the ins and outs of the eviction process, taking a huge amount of financial and emotional stress off of your plate.
Get Help With For Rent Houses by Owner
These are a few of the biggest myths about for rent houses by owner. When you become a landlord, you need to realize that doing it well means putting a lot of work in. But you don’t need to do it all alone.
Hiring a property manager can handle some or all of your landlord responsibilities. At Reedy & Company, we’re a full-service property management group who have helped countless Memphis property owners deal with all manner of landlord tasks.
If you want to speak to one of our representatives about helping you run your rental property, don’t hesitate to contact us today.
