About: This article addresses the topics of your preference and choice, willingness and limitations of taking up different landlording tasks and how that plays out in you being a Wealthy Landlord.
If you buy your first property at the age of 30, and somehow hold it for another 30 years as a landlord, what may happen?
There is a distinct possibility that one property by itself may make you a Rich Landlord!
The Small Landlording is a Different Ballgame
Whoever wants to become a small landlord, is looking for unreasonable or exponential growth of wealth with a very little investment! The simple logic behind the thinking of becoming filthy rich is that the historically real estate prices have appreciated more than And occasionally far better than the rate of inflation. However, being a small landlord is that niche of the real estate business where the potential of exponential growth comes with some crucial responsibility.
A huge percent out of millions of small landlord community of Noth America starts from scratch to become very wealthy!
Here are the factors affecting your growth as a small landlord.
Leverage and your down payment generating capacity
The small landlording is the business built up by leveraging other’s money or borrowed money(bank, regulated lenders, private lender). One fact of leverage is that you have to club your own money with the borrowed money to acquire a property. Your money is your down payment. Without that down payment, the lender wouldn’t feel safe of the risk and may not lend you the remaining money to purchase the real estate. It’s not the magic that you would have a source of unlimited down payment. So it comes to your saved, inherited or money generated from your job to use as a down payment initially. Later on, you may have other resources to generate further down payment. These resources would be like cash flow from rental income and further leverage obtained from the appreciation of your acquired property value.
Your lifestyle preferences and choice
If you have a regular full-time job which pays you good, you would be reluctant to quit in favour of full-time landlord business. It may also be about your preference. Do you like the disciplined lifestyle of working 9-5 and having a weekend off? On the other hand, you may like to work on your own hours, which is possible in landlording. I have seen some people have a passion for house renovation and handyman work. Are you one of them?
There mar many many landlords in North America, who work a regular 9-5 job and hold few properties. They can do that by delegating landlord responsibility to the property managemnet companies. There are many more who owns just one rental property within walking distance from their primary home. So they can easily maintain the property by themselves.
Depending upon your choices and preferences, you would decide as your landlord career progresses.
Handling tenants to Create Wealth
This is perceived to be the most challenging task and rightly so!
The small landlording is a huge thing in both the US and Canada. Because of the volumes of the opportunities available, there are services of property management companies available for SFH(single family home) or small multi-unit rentals. However, the charges of the management companies cut into your profit margin. There is a huge community of self-serving landlords. Those who do the landlording by themselves.
In most Metros, if you buy a new condo as an investment property, it’s not difficult to find a company that would take care of all your landlord responsibility. There are various options available when it comes to finding the new tenants and handling the tenants once the property is rented out. Your realtor can do a professional job of finding a new tenant. And you can delegate the landlord tasks to the management company. Or many property management companies provide the services for finding new tenants along with all the landlording responsibilities.
It’s individual preference that would guard your approach towards this issue.
Conclusion: The best approach to become a rich and successful landlord is to take challenges and keep learning while your landlord career takes great strides towards success. More tasks you do by yourself, more chances of your being rich quickly.