You don't hear the phrase "I want to be a landlord when I grow up" very often. Yet all manner of people find their way into landlording, often via an indirect route. Maybe they've invested in real estate, inherited a property, or moved from their own home but decided to rent it out because it's hard to sell. If you're thinking of becoming a landlord for the first time, there's much more to consider than how much rent you can charge. Let's look at some of the pluses and minuses to owning and managing rental property.
Being a successful landlord requires lots of practical know-how, business moxie, and familiarity with the market. Until about 30 years ago, the law didn't have much to do with it. Now, however, federal law and most states closely regulate nearly every aspect of your business. Not knowing the rules can land you in lots of legal hot water.
You've probably heard rental property owners refer to their lawyers as if these professionals were but a phone call -- or a shout -- away. But unless you own or manage many rental properties, you're not likely to have a lawyer on staff or even "on retainer" (where you pay a lawyer in advance to handle routine questions and issues). Fortunately, you shouldn't need to constantly consult a lawyer or even keep one in the wings, "just in case." You do have to be able to recognize those situations when expert help is needed -- even if it's just for some advice and coaching.
No landlord is happy to learn that tenants have formed a tenants' association (also known as a "tenants' union"). Such news conjures up the fear that managing your property will involve greeting a firestorm of complaints and bitter battles over rent, maintenance, and other issues. If you learn that your tenants have formed an association, don't despair. Instead, take charge of the situation and steer it to your advantage.