Becoming a landlord and managing one or more rental properties is a great way to develop an income stream. If managed carefully, you should be able to make an easy profit every month, all while slowly accumulating the benefits of property appreciation.
But if you’re already busy with a full-time career, you may worry that being a landlord is a full-time job in itself, meaning you’ll have trouble managing both simultaneously. On one hand, it seems like rent collection is a source of passive income, requiring little to no landlord interactions. But on the other hand, landlords have a ton of responsibilities.
So what’s the answer? Is being a landlord equivalent to a full-time job?
Responsibilities for Landlords
Let’s start by dissecting the main responsibilities that landlords are required to perform:
Researching and buying property. You can’t be a landlord without a rental property, but finding the right property is a lot of work. You’ll need to consider the geographic location, the condition of the property, the price point, the potential rent you can charge, and dozens of other variables. You’ll also be competing with other prospective landlords, which can extend your search even longer. Depending on the state of the market, this could demand weeks to months of work—but it’s over when you buy the property.
Managing paperwork. You’ll be responsible for putting together various types of paperwork for your property and your future tenants, including lease agreements. It’s best to work with a lawyer to get these right, but even so, it’s going to take time.
Marketing a property. When your property is vacant, you’ll be actively losing money, so it’s important to attract new tenants as soon as possible. To do that, you’ll need to aggressively market and advertise your property.
Screening tenants. Then, when the applications start rolling in, you’ll need to spend the time and energy necessary to screen your prospective tenants. Fortunately, this isn’t a constant responsibility, but it will recur when your unit empties again.
Property maintenance and repairs. Throughout the tenant’s tenure and between tenant occupancies, you’ll need to take action on property maintenance and repairs. Depending on the condition of the property, this may take a few hours a week or almost no time at all. You can also delegate these tasks to a property management firm, or hire a contractor to do this work for you, saving you time at the potential expense of your profits.
Dispute resolution. Occasionally, your tenants will have problems, from inability to pay rent on time to complaints about noisy neighbors. You’ll be in charge of finding resolutions for these issues, which range from innocuous and quick-resolving to time-intensive tragedies.
Rent collection. Collecting rent is mostly passive, but it’s still something that requires your attention. Depending on your circumstances, you may physically travel to pick up the rent, accept rent through the mail, or use an online system to collect it. You may even have a property management firm do it on your behalf.
Occasionally, you may deal with tenants who refuse to pay rent or are causing damage to your property. If your dispute resolution attempts fail, you may have no choice but to forcibly evict them. Eviction is a legally complicated and often messy process, and one that can take hours of your time. Fortunately, it’s a bit of a rarity—so you may never need to deal with it—but if it comes up, it can be devastating to your time and productivity.
After a tenant moves out, you’ll need to spend time getting the property in good enough shape to begin marketing again. Like maintenance, this is something you can delegate or hire out, but if you choose not to, it can cost you a lot of time.
As you can see, many of these responsibilities are temporary, yet intensive, and some may never occur in your property. The variables can swing wildly from one end of the spectrum to the other, so it’s practically impossible to say how many hours it takes to manage a property.
Part-Time vs. Full-Time Landlords
There’s only one way to be a truly “hands-off” landlord, and that’s to work with a property management company. If you enlist the services of a property management firm, you can rest assured that most of the responsibilities above will be taken care of on your behalf.
Otherwise, you’ll basically be drifting between being a part-time landlord and being a full-time landlord, in response to these variables:
The number of properties in your portfolio. Obviously, with more properties comes more complexity and more responsibilities. A lone single-family unit probably won’t be a full-time job, but a 12-unit apartment complex could easily become one.
The integrity of your properties. Also think about the nature of your properties. Are these old buildings in a bad part of town, in need of constant repair? Or are these modern properties with brand-new features designed to last as long as possible? Low-maintenance properties are the way to go if you want to minimize the time you spend.
Your tenant screening standards. Tenant screening can save you a lot of future headaches. Better tenants will pay their rent on time, keep your property in good shape, work to minimize disputes, and will never put you through the hassle of eviction. But if you skip this important step, you’ll be opening the door to more trouble.
Your attentiveness. The more proactive you are, the better. Regular maintenance and attention to your property will resolve most issues before they become time-intensive.
Your level of help. Are you working with a partner? Do you hire contractors to help you? Are you working with a property management firm? Or are you trying to do everything yourself?
If you’re interested in reducing the number of hours you spend as a landlord, or if you’re in need of professional help, your best option is to work with a property management firm. Contact Green Residential today to learn more about what we do, and for a free analysis of your property!