As a newly minted landlord for over 2+ years now, I can confidently say it still feels like a full-time job.
Naturally, as a female, I gravitate towards putting others’ needs first before my own which leads me to be a control freak when it comes to my precious real estate.
After all, it is one of the few types of non-fungible assets that is actually STABLE and cannot be replaced.
At 21, what I can also say is that owning and dealing with tenants starting at 19 for my own place, the time when one starts college, attempts to go as far away as possible from home, and attempts to juggle multiple part-time jobs, managing people beyond yourself is not everyone’s cup of tea.
Is there passive income involved? Eventually — if you have the delayed attention span for it these days which my generation severely lacks.
A good evaluation to see if you’re up for the whole landlord thing is to see how well you handle:
-Any pet: most favorably puppies
-Babysit OVERNIGHT
-Buy a fixer-upper and negotiate, handle, and deal with everyone involved. It won’t be pretty and requires patience and deluxe coordination
-Buy a summer home and 90% chance you’ll end up working for it more than enjoying it:)
Those should be decent ways to see if you’ve qualified to be a landlord/owner. It’s the people, not the place that needs handling.
Once you get to this stage, you will not only appreciate any stable and frightened tenant that comes your way, you will be grateful all the sweat and tears of finding one eventually paid off. As they say, if you fail to prepare, prepare to fail and with tenants, it’s make it or break it.
The Case of the Unknown
Given that background checks, credit history, diplomas, family history, referrals, etc. don’t illustrate the entire picture, especially what you do when no one is watching and how your divorce is unfolding, I’ve found even the most studious, accomplished tenants with prestige background checks can still have no common sense and want to take advantage of you. Econ 101 will help you in this tight supply crunched housing market but not when dealing with a stranger.
The key is to keep the relationship professional at all times and never too personal. Try not to slip out that they’re your first tenant or you take it easy. That shows weakness and will end up charging you an arm and a leg later on. Indicate to them you are close by watching over them, persistent, timely, need to keep it professional and of course, have the house in the same shape that they found it in.
Clearly going over each and every rule and procedure in the lease notice will reduce headaches for both of you later on.
These minor yet vital rules include:
-Each hole in the wall to hang up any pictures cost an extra $50
-Consequences + charges of anything moved/broken/changed in the interior/exterior of the house = think of everything!
-(To end on a good note no matter who you are working with) is to have them pack up their stuff by a certain date and don’t leave it there or else they need to pay for garbage disposal themselves.
Ironically, these are the most common annoyances that have come up with those that had the most prestige track records with top marks and average credit scores.
I even knew back in middle school grades weren’t everything but on a tenant’s application, it subconsciously boosts their rapport. Don’t be fooled! Not everything on paper translates to how people live.
If you’re assuming a popular entrepreneur who is interested in renting out your place for 2 years is the ultimate fit, remember this.
Lucrative doesn’t mean forever. In fact, nothing is temporary, especially social media.
If your tenant doesn’t have a steady stream of income from a Fortune 500 (the most favorable from landowners and most co-op boards) that’s a red flag. No matter if you’re a YouTuber earning 8 figures per year or Joe Rogan, believe it or not, their income will be seen as less mature and reliable as a tenant than for someone earning a third but with better credit working for a brand name corporation that you may love or hate.
People crave consistency and reliability, especially with their most precious assets: their homes. Landlords have to deal with a lot and even working with one can be a full-time job starting out.
You may be wondering as a full-time student embarking on my senior year in the fall, how did I manage?
Being a Landlord Without Being Full-Time
This is certainly manageable but once again, requires a certain personality, diligence, and work ethic that is separate from the office kind.
At the onset of the pandemic, I was able to snatch a one-of-a-kind deal across campus and rent it out to people who pledged they would stay throughout the pandemic since they expected it at the time to last a few days to weeks.
Fortunately, they stayed till this day and didn’t get impatient like millions of Americans who ran for dear life to the suburbs for some land and found NYC to be the most peaceful island they’ve ever been on!
As a lifelong New Yorker, I tend to forget NYC is an island. We are so packed like sardines it feels like a country in itself.
#1 Closer to Home (Your Other One)
Managing your time as a full-time employee versus landlord is no easy task but manageable. If I can do it, I think anyone can, especially in the city, with everything at lightning speed and people all over the place, it’s hard to keep up with all obligations, especially if you’re not situated in one borough.
Although Manhattan is an island, it is hard to get uptown to downtown and vice versa quick so being close distance-wise to your rental is essential to check up on your tenants at any time and swing over to make sure they haven’t crashed any party.
#2 Treat Being a Landlord As Your Part-Time Job For a Few Months
In addition to being close and treating it as a babysitting job for a while, it would be helpful to get into the groove of having the rental as a part of your lifestyle and your permanent part-time job. Replace it with the other gig you were planning on getting at a retail or fast-food chain and put more effort into the asset you own and are now sharing with someone else. Real estate is more valuable and stable than investing those $16 per hr salary earnings after all.
There is no better feeling than being able to nurture and cherish the safe haven you once loved and provide good care for someone else.
As with any job, don’t tie your sole identity to your rental. Give your tenants breathing room; however, let them know you are reliable and trustworthy so much so that it would be foolish to move.
As with everything, the more time and energy you spend on something, the more it will return dividends later on. The worst risk is to not risk anything and before diving into the deep end, model and practice with less expensive options before there’s an actual roof over heads.