Owning residential real estate can be profitable, but it’s not as easy or glamorous as it sounds. In fact, the challenges of being a landlord begin early on and mostly center on time and money. Did you get in over your head with a rental property that you no longer have the time, money, or energy to manage?
If being a landlord doesn’t seem like such a great idea anymore, you have several options depending on whether or not you want to keep your property or break away completely.
1. Hire a full-service property management team
If being a property investor is appealing, but you just don’t want to do the work, hire a property management company to handle all of your affairs. They’ll do everything for you, from screening tenants and collecting rent to advertising vacancies and serving eviction notices.
Property managers are the easiest way to keep your real estate asset(s) while delegating all the stressful aspects of being a landlord. Whether you’re stressed out by your tenants or unending maintenance tasks, outsource your landlord duties to preserve your long-term income.
2. Sell your property
When being a landlord is too overwhelming and you don’t have the budget for a property manager, selling is the easiest way out. Normally, you’d list your home through traditional means, put it on the market, and wait for the right buyer. However, if you’re too stressed to go through this process, consider selling your home for cash. You’ll bypass the need for inspections and repairs, and you won’t have to worry about buyers changing their mind or not being approved for funds.
Companies like Light Street Residential buy homes in any condition and deposit cash into your account generally within 24 hours. If you’re looking for a fast way out from underneath the burdens of being a landlord, this is your ticket.
3. Tighten up your lease terms
Dealing with bad tenants is a common reason landlords get tired of owning property. Let’s face it, nobody wants to wake up in the morning and spend the day dealing with a tenant who won’t pay rent, gets angry, insists on violating the lease, or needs way too much of your time. Usually, this situation occurs when tenants aren’t screened to high enough standards before being accepted.
If you’re committed to remaining a landlord, but you need some relief from the stress of dealing with bad tenants, here’s what you can do:
Evict tenants who violate their lease. Don’t cut any slack or give second chances. Just give notice and start the eviction process. The sooner you can get them out, the faster you can rent the property to a better, more deserving tenant. Bad tenants are a liability and can take a huge chunk of cash out of your pocket with just one lawsuit, even if you win.
Strengthen your criteria. Once you get a bad tenant out of your property, you need to make sure you don’t repeat the experience. The first thing to do is implement stricter requirements for tenants. Require applicants to have at least a 650+ credit score, no evictions on their record, and earn three times the rent in gross income. Most people won’t submit an application when they know they don’t qualify.
Don’t allow pets or smoking. If you’re struggling to acquire high-quality tenants, you can reduce the potential for damage by prohibiting pets and smoking. This won’t take care of all possible issues, but it will prevent some of the worst types of damage.
As stated earlier in this article, if managing tenants is too much, hire a property manager to outsource your landlord duties. There’s nothing wrong with being a hands-off investor, and preserving your mental and emotional wellbeing is worth the cost.
4. Take on an investment partner
Maybe you’re torn between selling and hiring a property manager, but you don’t really want to give up control if you hold onto your rental. You may want to consider taking on an investment partner to balance your workload and responsibilities. Going into a business partnership isn’t a decision to take lightly, so be sure to thoroughly vet everyone you consider and make sure you’re a complete match.
Being a landlord can be profitable, but at a price
They say everything good comes at a price, and that’s true for residential real estate. There is a big potential for profit, but only if you’re willing to pay the price in terms of time, money, and energy. Being a landlord isn’t for everyone, so if you’re struggling, do what’s necessary to maintain your health and peace of mind.