Are You Cut Out to Be a Landlord?
by Candace Bahr, CEA, CDFA and Ginita Wall, CPA, CFPreg;
www.WIFE.org
www.MoneyClubs.com
There are many benefits to investing in rental property: the rental income, the tax write-offs, and the increase in value over the years.
But there are drawbacks as well. Being a landlord involves more than simply buying property, finding a tenant, and letting the cash flow in. Some people are very comfortable with the kinds of activities that landlords face almost daily. Others find them very difficult. Answer the questions below with a "YES" or "NO" to see if you have what it takes to be a landlord:
Do you deal well with people on a regular basis?
Do you deal well with risk?
Do you enjoy taking care of your own home?
Are real estate prices appreciating in your area (or do you expect them to in the future)?
Do you have spare cash (or home equity) to invest?
Are you good at keeping records and completing paperwork?
Do you have free time to spend on real estate investing?
Do you have any small business experience?
Can you juggle several tasks at the same time?
Are you willing to do repairs and maintenance yourself or are you willing to pay someone to have them done?
If the monthly expenses are greater than the rents, do you have the financial staying power to cover those expenses, year after year?
If the property becomes vacant for a month or more, do you have the resources to cover the mortgage payment?
Will you be able to manage the property on your own?
Have you talked with other local landlords about their experiences and challenges?
Will you treat this like a business, raising rents when market conditions allow?
Would you feel comfortable evicting a family with five hungry children if they didn't pay the rent?
If you can answer #147;Yes!#148; to more than five of the above questions, then you may have the personality and skills needed to be a successful landlord. Real estate investment, over the long haul, can be a very rewarding activity, but it takes work and time.
Cofounders of the nonprofit Women#146;s Institute for Financial Education (
www.WIFE.org
) and the new Money Club for women (
www.MoneyClubs.com
), Candace Bahr, CEA, CDFA and Ginita Wall, CPA, CFPreg; are trusted financial guides for millions of women. Both authors are nationally-recognized experts on women and money and regularly appear on CNN and CNBC and in national financial and women#146;s publications. This article is excerpted from their book
It#146;s More Than Money#151;It#146;s Your Life! The New Money Club for Women
(John Wiley, 2004). Permission granted for use on DrLaura.com.
