Renting property can be an lucrative endeavor. In fact, that’s truer today than ever before. The emergent trend toward increased renting was highlighted two years ago by Richard Florida at CityLab. His analysis is comprehensive enough to warrant serious attention. The data he examined suggested that the trend isn’t apt to change. Flash-forward almost a year later and experts at Pew Research Center published a report declaring that more US households are renting than at any point in 50-years. That means a surplus of possible tenants for landlords but it also means a lot more work.
That’s one of the main dilemmas for countless property owners. There’s promise in the numbers, but there’s also considerable risk. However, Amy Bergen at Money Under 30 already shared her thoughts about what it takes to be a successful landlord. She itemizes the pros and cons while outlining the steps necessary to achieve success. Her pointers include everything from understanding the applicable laws and investigating neighborhoods to screening tenants and planning for unexpected costs.
Like so many other professions, being a landlord isn’t portrayed to the grand majority of people. We have those who expect the pursuit to be nothing more than collecting checks every month, and those who anticipate endless responsibility. The truth is somewhere in between. Erin Berlin at The Balance does an excellent job of describing what one could realistically expect as a landlord. She opens with two of the most critical realities that undermine otherwise well-intentioned landlords. That would include the spontaneity associated with the position and the fact that landlords must wear many hats.
There’s some inherent value to extract from doing the work yourself but most aspire to relinquish those duties in favor of more relaxed pursuits. That’s why property managers exist–they incur the responsibilities otherwise reserved for landlords and serve as deputized agents. Lucas Hall at Landlordology addressed the question of whether or not to hire a property manager. His calculus is broken down into ten key considerations ranging from separate time commitments and professional aptitudes to your individual mindset and confidence in collaborating with contractors.
Landlords motivated by total control and the rush of attending to a wide array of urgencies should avoid property managers. That being said, property managers can sometimes offer much more than the convenience of just having someone else inherit your obligations. They can bring wisdom and innovative ideas, too. Traditionalist landlords sometimes fall prey to antiquated practices, whereas those with pioneering mindsets experiment more (e.g., finding ways to advertise rental property for free or streamlining the application screening process). It’s difficult to quantify the advantages of having another perspective but it’s also impossible to do without trying.
Many landlords argue the soundest strategy is mastering the core responsibilities before outsourcing them. Relying on that approach ensures that you can hold contracted property managers accountable but it also requires that you understand the nuances associated with the role. That isn’t as daunting as it once was thanks again to Lucas Hall at Landlordology. He did everyone the favor of describing the seven cardinal rules of property management. Also, he directs readers to numerous resources they can return to for guidance.
Everyone has a preference when it comes to relinquishing their power. Knowing when and why to renounce your authority is the first step. Inc. editor, John Brandon publicized some compelling thoughts about the subject, declaring that “as a business leader, you can either control or enable.” The most successful ones excel at the latter rather than the former, which is a crucial lesson that far to few internalize. Consider these things the next time you contemplate outsourcing to property managers.