We often get this question from people in Nashville: should I be a landlord? Whenever I hear this, I like to ask prospective owners if they have the money to operate that property and treat it like a business. They have to ask themselves if they can afford to have the property vacant for three months and replace a water heater. If the owner says no or looks confused, he doesn’t have the money to be a landlord. We don’t want to get a tenant involved in a situation where a landlord does not have the financial resources necessary to keep a property running.
To be a landlord, you need to be able to treat that property or properties like a business and not a hobby. One way to distance yourself emotionally is to hire a professional property manager. Many of our owners will look at a property from a business standpoint and expect that a tenant will cover the mortgage with rent payments. This is true, but we prefer our rental properties to be paid for. That takes a lot of pressure off the owners. When you have to have a rent check every month in order to make a mortgage payment, it’s going to cause stress. There will be months that there is no rent coming in because of vacancies, etc.
You also have to budget properly when you’re a landlord. Roofs are not cheap. A new roof will cost you thousands of dollars and you can only patch a hole so many times. It’s illegal to rent a property that has a roof leak, so taking care of these issues is expensive and unavoidable. You’ll need to replace carpet, floor coverings, tile and major appliances like stoves, refrigerators and dishwashers. You’ll also need reserves set aside for the great unknown – whatever happens that you don’t expect.
As a property management company, we can help you plan for those expenditures. I consider it a great compliment when I call an owner and explain a repair that’s necessary to the property. Whether I tell him it’s going to cost $400 or $4,000 the owner tells me I earned his trust and lets me go ahead and do what I think is best. That’s a great reason to use professional property management.