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 significant toll on you financially if you aren’t prepared. So, you need to plan ahead and understand exactly what you’ll be responsible for as a full-time landlord. Follow these tips if you want to know what it takes to become a full-time landlord.
How to Transition from Part-Time to Full-Time Landlord
Changing from a part-time landlord to a full-time landlord can take some time. You’ll want to save money, learn more about the industry, and prepare to take on a more fast-paced role. If you’re ready to make the jump, let’s go over what it takes to become a full-time landlord.
- Have a Financial Cushion to Fall Back On
- Find a Good Mentor
- Create a Business Plan
- Get Organized
- Create a Solid Tenant Screening Process
- Find the Right Office Space
- Find Reputable Contractors
- Learn About Marketing
- Partner with a Property Manager
Have a Financial Cushion to Fall Back On
Save as much money as possible before quitting 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!
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.
That said, you may want to 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.
To find a professional, 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.
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
Remember, you have to treat your rental property business like a business if you want to succeed. Unfortunately, the landlords who treat their business like a hobby often end up back at their job as a result.
When you only have one or two properties, it’s easier to get away with being disorganized. But, on the other hand, when you’re a full-time landlord managing several properties, you should have set systems in place for everything you do.
One tip is to create physical files to store your documents and information. After all, keeping information online using rental management software is excellent. However, physical copies of lease agreements and contracts are also helpful. Then, depending on your preference, you may organize the documents by the tenant or property.
Also, make sure you 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.
Create a Solid Tenant Screening Process
Any successful landlord will tell you that the tenants you choose can make or break your rental property business. After all, 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, ensure a thorough tenant screening process is 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!
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 must 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 have a place to safely store all of your business-related items. Or, if working from home isn’t your thing, you can try a co-working space or rent an office space. First, however, you must ensure you budget enough to pay for the area each month.
You may even choose to get a dedicated cell phone for handling anything related to your rental property business. However, 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.
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 search for “Baltimore plumbers.” Then, you can start looking through the results to find the best option.
Make sure you also check Google or the contractor’s website reviews before you hire someone. That way, you can see whether their previous customers have been happy or displeased with the service.
Learn About Marketing
No matter how good of a landlord you are, there’s a good chance you’ll 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 rental listing sites like Apartments.com and Zillow and take advantage of social media. Otherwise, high-paying tenants may never even know your property exists.
Partner with a Property Manager
If all of the responsibilities mentioned here seem overwhelming, you may wonder whether 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.
Most Washington DC property management companies and property managers help with day-to-day tasks like tenant communications, tenant screening, maintenance, rent collection, and more. So then, you can focus on other avenues of your business without focusing on each property.
Find a Reputable Property Manager Today
If you’re looking for a comprehensive property management team to help with your rental business, look no further than Bay Property 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. We offer full-service rental management near Baltimore, Philadelphia, Northern Virginia, and Washington, DC.