Want to rent out your property? Read this first to see if you have what it takes to be a landlord.

If you have an empty home waiting to be sold, renting seems like the perfect solution. Move a few tenants in and let them cover your carrying charges and perhaps make you a small profit on the side. What could be easier? Here are some reasons why being a landlord is not as simple as it seems.

  1. Your property is not rental material. A remote location, limited space and other issues may make your home unattractive to renters at any price. Most renters are looking for a home that is near work, shopping and schools. They want a decent sized kitchen and bathroom and enough bedrooms to work with. If your home doesn’t meet these requirements, it may never be rented out in the first place.
  2. You live too far away from the property. The farther you live away from your rental property, the harder it will be to monitor what is happening to it. Collecting rent, taking care of maintenance and eviction will all be made more difficult and costly if you live in another county – or state.
  3. You don’t understand cash flow. The purpose of renting is to make a profit from your property, or to at least break even on the mortgage, taxes and maintenance costs of ownership. You must be certain to charge enough rent to cover not only the fixed costs but also to allow for emergency repairs and unexpected expenses. If you do not charge the appropriate rent, you can have excellent tenants and still lose money.
  4. You are too lazy about screening applicants. All would-be tenants are not equal. Choosing a tenant that is solvent, clean and respectful of your property and the lease agreement is key to having a pleasant landlord experience. You must be prepared to ask for employment information, renter’s history and references – and check them!
  5. You haven’t learned the legal side. Having a solid lease agreement will not only eliminate confusion about you and your tenant’s rights, but it can be a tool to help you recoup losses if the tenant and landlord relationship goes awry. There are many standard lease agreements available. You should either purchase and learn every item on it or have a customized lease form made by an attorney.
  6. You think it is a no-hassle payday. If you think that you will hand a key to someone and begin receiving rent checks on the first of every month, you have not accepted the realities of renting. Tenants will need in-home repairs. They will need to be reminded to keep the yard clean. The home will need to be treated for termites. Heating and air conditioner filters will need to be changed. Being a landlord is a job, not a free paycheck.
  7. You haven’t considered maintenance and repair issues. If you are handy, you may elect to do your own repairs and maintenance. If your talents do not fall in this category, you will need to find reliable handymen, plumbers and appliance repairmen to assist you in keeping the rental in livable condition.
  8. You are too soft hearted to enforce your own lease agreement. “But Mr. Landlord, we’ve had a hard time this month. Perhaps we can pay half now and the rest on payday?” If you have a hard time saying no to this or other situations, you may not be cut out for this profession. While it is not necessary to be heartless, you must be willing to protect your interests, lest your tenant’s money problems quickly become your own.
  9. You hate conflict. Sometimes a lease will not go smoothly. If you have tenants who damage the property, fail to pay rent on time (or at all) or cause other headaches, you must be willing to deal with the situation. The only alternative is to hire a property management company to handle your landlord issues for you, at a price.
  10. You don’t want to go to court. It is possible for tenant problems to go far enough to warrant eviction. This means having the local law enforcement serve papers and, in extreme situations, physically remove the tenants from your property. It may be necessary to go to small claims court to attempt to collect unpaid rent and damages to your property. If the very idea of this makes you shudder in horror, perhaps you should not get into the landlord profession.