6 Things You’ll Need When Getting Into DIY Landlording

by | BiggerPockets.com

Being a landlord isn’t as good or bad as people often make it out to be. In most cases, the reality lands somewhere between the two extremes. But if you’re going to delve into the world of real estate investing, you’ll need a few things to be successful.

6 Things to Get Squared Away

While they may not say as much out loud, most people are under the impression that they could be a landlord if they wanted. They assume that it requires nothing more than a couple of contracts, a few phone calls, and mailbox to collect a rent check. But as any experienced landlord knows, nothing could be further from the truth.

Landlording is a challenging profession and you need the right resources and mental capacities to thrive. In particular, you’ll need the following:

1. Patience

To say that things don’t always go as planned in property management would be the understatement of the century. Destructive tenants, late payments, increases in property taxes, issues with neighbors, broken lease agreements…things tend to go wrong quite frequently. You’ll need a healthy measure of patience to be successful.

short-sale

2. Personal Finance Skills

At the heart of successful property management is exceptional money management. If you can’t get the dollars and cents to add up in the right spots, you’ll have trouble turning a profit and getting the ROI you need to stay in the business long-term.

As a real estate investor and landlord, personal finance skills come in handy. If you’re good at managing your own budget, maintaining a surplus, and predicting expenses in your own life, there’s no reason to think you won’t be proficient as a landlord. (The opposite is true, as well.)

3. A Good Vehicle

If you own a handful of properties, you’ll be doing a lot of driving between them. You’ll also find that you need space to move, carry, and transport various items—such as appliances, furniture, and building supplies.

You need a vehicle that’s durable. Not only will this help you get the most out of the vehicle, but it will also help you on the insurance front. As CheapAutoInsurance.co explains, “Damage to the vehicle is the biggest cost of insurance, so the stronger the vehicle, the less you will have to pay in premiums. Before buying a car, talk to your insurer regarding the quotes on different models.”

4. Basic Handyman Skills

Not every landlord does his own maintenance and repairs, but even if you contract out most jobs, there are certain basic handyman skills that you’ll need to know how to do. For example, it’s helpful if you can:

  • Do basic landscaping
  • Patch drywall
  • Fix a running toilet
  • Swap out air filters
  • Paint
  • Pull up carpet
  • Run a pressure washer
  • Etc.

These are all very simple skills that you shouldn’t have to pay to outsource. Knowing how to handle them on your own will save you both time and money.

rehab-exit-strategy

5. Cash Cushion

In hot markets—such as the what’s happening right now in most parts of the country—most rental properties won’t have difficulty staying leased. However, all it takes is a blip in the market for that to change. Maintaining a healthy cash cushion will ensure you can sustain rough patches.

6. Good People Skills

“Perhaps the most underappreciated art in the rental-housing industry is that of simple communication. A majority of unpleasant issues faced by landlords and tenants seem to sprout from the soil of communication breakdown,” Seattle Times writes.

The significance of communication really points back to the need for good people skills. Whether you’re introverted or extroverted, outgoing or reserved, you need good people skills to navigate the challenges of landlording. The more efficient your communication, the better your results will be.

Are You Prepared?

In all honesty, DIY landlording isn’t a good idea for most people. It’s highly suggested that you hire a property manager to handle some of the “dirty” and “busy” work, so that you can focus on the big picture decision-making. But if you’re looking to maximize your profits and feel like you have it in you to tackle it, have a go. As long as you possess a healthy mix of the aforementioned skills and resources, you’ll be fine.

Anything you’d add to this list?

Comment below!

About Author

Larry Alton

Larry Alton is a professional blogger, writer and researcher who contributes to online media outlets and news sources. A graduate of Des Moines University, he still lives in Iowa as a full-time freelance writer and avid news hound. In addition to journalism, technical writing and in-depth research, he’s also active in his community and spends weekends volunteering with a local non-profit literacy organization and rock climbing.

10 Comments

  1. kenneth chen

    Dear Larry, Greatly appreciated. Love the landlordstation link. We are finding a new tenant now and will add unit inspections to our agreement. On another note, I just purchased my first pressure washer and eager to catch up on cleaning the exterior.

  2. Patrick Soukup

    DIY Landlording is a great way to start. Get the cash flow going and increasing to a point where you can step away. Anything less than 5 properties is manageable if you can have these skills listed above. Once you get more than 5 and are trying to DIY landlord, the properties begin to suffer, you can always point out DIY managed multi-families.

    Thanks for the post!

  3. John Teachout

    One key thing to keep in mind if you’re a DIY landlord is that it is NOT a passive activity despite what the IRS says. It takes a lot of effort to keep all the balls in the air. We’re managing our 7 sfr properties that have tenants, are renovating an empty one and keeping a sorry one on the back burner until we get to it. We consider it our full time jobs (wife and I) and essentially apply full time hours each week. We also airbnb rooms in our home. We like having our own schedules so it’s worth it to us. This is our only source of income and it’s been quite a ride.

  4. Julie Marquez

    First, I would say a good knowledge of your local landlord/tenant law. Without those rules to guide you, you shouldn’t be a landlord. Though you knock just the idea of having good contracts and forms, I believe those are the basic foundation of running your business. Without a solid contract in place, it doesn’t matter what kind of car you drive. Even a DIY landlord has a list of contractors they use – it’s cheaper for me to hire a carpet cleaner than to do it myself. Overall, those are great things to know!

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