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The Difference Between “Rental Owner” and “Landlord”

Sterling White
2 min read
The Difference Between “Rental Owner” and “Landlord”

Is being a real estate investor and being a landlord the same thing? Or are they two completely different roles? Knowing the distinction is incredibly important and can make all the difference in getting what you really want out of real estate.

We are all more than aware of the need to invest. Owning rental properties is a way to invest in real estate and build wealth. But becoming a hands-on landlord can be distinctly different than pure investing for a number of very important reasons.

Being a hands-on landlord can be great. It can be therapeutic, rewarding, and a major upgrade from many people’s last job. Just make sure you know the difference BEFORE you get in. As we know, it’s always easy to get in than out.


A Mindset Difference

Being an investor versus a landlord is a mindset. Not everyone realizes it at first or recognizes that there could be a better option. Many new investors get started reading about real estate and owning rental properties and rush right in. Sometimes they don’t finish the book, they don’t look at all their current options available with today’s technology, or they think they can do the hands-on DIY landlord gig better than anyone else. Sometimes this works out perfectly. In many cases, it doesn’t.

Related: The 5 Levels of Property Management Expertise

Realistically, this often becomes more of a grind and stressor than anything else. Believe me, I tried it. I detailed some of the reasons I personally made the switch to hiring management out on the BiggerPockets blog here. It may be better than working at Starbucks or in a boring cubicle, but do not underestimate that property management is more than a full-time job. It means being on call 24/7/365 days a year. If you are in your dream condo next door and never want to travel, that might not be a problem. But most people get into real estate dreaming of extra cash to go live life, to getaway on holidays, or to move somewhere luxurious.

Scale is another major consideration. Most don’t start out with a big enough property to settle all of their future financial goals. So if you are tied to that first triplex or 20-unit multifamily apartment building, you may never find the ability to grow to where you wanted to be financially.


Related: The Compelling Reason to Consider Hiring a Property Manager For Your Rentals

Want to Scale? Then You Can’t Do it All

You may be a better landlord for your property than anyone else, but if you want to grow and scale, you will have to be willing to let someone else do the job.

In reality, owners are rarely the best property managers. They make emotional, not objective, decisions and put themselves at big risk from a variety of liabilities. They often can’t help it. And this remains true when landlords try to bring in amateur help instead of delegating to professional third-party property management companies, too.

If you really prefer not to delegate out your property management, then build a professional company yourself. Just make sure you build a model that makes it hands-off for you. Investing and generating wealth and passive income from an investment in its truest sense should never rely on the amount of hours you can put in, how often you’re available to be on call, or a skill set that only you possess.

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What’s been your experience so far? What has driven your decision to do it the way you do?

Comment below!


Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.