Think you’re ready to become a full-time landlord?
While becoming self-employed can be exciting, it can also be scary and take a huge toll on you financially if you aren’t prepared. So, it’s important for you to plan ahead and understand exactly what you’ll be responsible for as a full-time landlord.
To help you out, we’ve put together the following list of 9 tips to help you make the career transition. By the time you’re done reading this post, you’ll be well-equipped to handle all of the tasks associated with being a full-time landlord.
How to Transition from Part-Time to Full-Time Landlord
1. Make sure you have a financial cushion to fall back on.
Save up as much money as you can before you quit your day job. It’s a good rule of thumb to save at least six months’ worth of money to cover your regular bills and expenses. Then, you can have some peace of mind knowing you’ll be able to take care of yourself regardless of how profitable your rental property business is at first!
2. Find a good mentor.
It’s no secret that owning a rental property business is a tough job. You don’t just own properties – you have to make repairs, handle tenant requests, deal with late rent payments, and more. And if you don’t have an eye for profitable properties, you could actually lose money when you invest in a property.
Find a good mentor who can serve as your guide. That way, you have someone available to advise you so you can make better business decisions.
Not sure where to find the best mentor?
Try searching LinkedIn or Google for a local, seasoned landlord who might be willing to help you. You could also attend local events for landlords or join a Baltimore landlord association.
3. Create a business plan.
When you’re a part-time landlord, a business plan isn’t as important because you don’t rely on your business to pay the bills. However, when you’re fully dependent on your rental property income, you need a business plan to ensure that you can consistently make enough money.
Here are some of the sections you should include in your business plan:
- Mission statement
- Company description
And remember, you have to treat your rental property business like a business – not a hobby – if you want to succeed. The landlords who treat their business like a hobby often end up back at their 9-to-5 job as a result.
4. Get organized.
When you only have one or two properties, it’s a bit easier to get away with being disorganized. But when you’re a full-time landlord managing several properties, you should have set systems in place for everything you do.
Create physical files to store all of your documents and information. Depending on your preference, you may choose to organize the documents by tenant or by property.
Make sure you also back up all of your physical files using a cloud storage service like Dropbox. That way, you can easily access any document regardless of what happens to the physical copy.
5. Make sure your tenant screening process is solid.
Any successful landlord will tell you that the tenants you choose can make or break your rental property business.
Think about it. Even if you choose the most profitable properties and the best contractors, a tenant who refuses to pay rent and seriously damages your property could put you in financial trouble.
So before you even think about becoming a full-time landlord, make sure you have a thorough tenant screening process in place. If your tenant screening process has failed you in the past, analyze it to determine what went wrong and avoid making the same mistakes moving forward.
Tip: Check out this blog post for a guide to screening tenants thoroughly!
6. Find the right office space.
As a part-time landlord, you can work from just about anywhere – even your dining room table might suffice! However, you have to get more serious about your office space as a full-time landlord.
Consider using one of the rooms in your home solely as an office. That way, you can shut the door and focus, and you have a place to safely store all of your business-related items.
You may even choose to get a dedicated cell phone for handling anything related to your rental property business. If you don’t want to buy a new phone, you should at least consider getting a separate phone number to use on your current cell phone.
7. Find reputable contractors.
When you invest in several properties at once, you need easy access to contractors who can make repairs and service those properties as needed.
To find the best contractors, search for specialists in your area on Google. For example, if you need a plumber for your Baltimore property, you might type “Baltimore plumber” into the search bar. Then, you can start looking through the results to find the best option.
Make sure you also check Yelp or Angie’s List reviews before you hire someone. That way, you can see whether their previous customers have been happy or displeased with the service.
8. Learn about marketing.
No matter how good of a landlord you are, there’s a good chance you’re going to want to place a tenant in a property fast at some point.
That’s why you need to learn how to market your properties effectively. Long gone are the days of simply placing a “For Rent” sign on a property to attract lots of tenants. Now, you’ve got to use sites like Craigslist and Zillow and take advantage of social media. Otherwise, high-paying tenants may never even know your property exists.
9. Partner with a Baltimore property manager.
If all of the responsibilities mentioned here seem overwhelming, you may be wondering whether or not becoming a full-time landlord is worth the trouble.
The good news is that you can become a full-time landlord and avoid many of the tasks associated with running a rental property business by partnering with a Baltimore property manager at Bay Management Group. We handle tenant screening, rent collection and more so you don’t have to. That way, you have more free time and turn your rental property business into a more passive source of income.
To learn more about property management in Baltimore and the surrounding areas, contact us today.