Being a landlord can be a lucrative business. But it’s not without its challenges, especially for those who are looking to start small. This is where the concept of tiny landlords comes in. A tiny landlord is essentially someone who owns and rents out just a few properties – perhaps one or two. They may be new to the game or simply looking to invest on a smaller scale. Here, we’ll explore the pros and cons of being a tiny landlord, alongside some practical tips on how to get started.
The Pros of Being a Tiny Landlord
One of the biggest advantages of being a tiny landlord is that you have greater control over your properties. You can choose which tenants to rent to, set your own rental rates, and handle any maintenance or repairs needed. This level of independence can be appealing to those who aren’t interested in becoming a large-scale property manager.
Another benefit is that you have a more personal relationship with your tenants. If you only own a few properties, you’ll be more likely to get to know your renters on a first-name basis. This can lead to a more positive and collaborative relationship, and may help to decrease the likelihood of disputes.
Finally, as a tiny landlord, you’re not beholden to any investors or partners. You don’t need to answer to anyone but yourself, which can make the business feel more manageable and less stressful.
The Cons of Being a Tiny Landlord
Of course, there are some downsides to being a tiny landlord as well. One of the biggest challenges is that it can be difficult to make a living solely from renting out a few properties. This is especially true if you live in a city with high property values, where rental rates may not keep pace with the cost of living. As a result, many tiny landlords rely on other sources of income to make ends meet.
Another drawback is that, as a tiny landlord, you may have less access to resources and support. Large-scale property management companies often have legal teams, marketing departments, and other resources at their disposal that can make managing multiple properties easier. As a tiny landlord, you’ll need to do all of this yourself, which can be time-consuming and challenging.
Getting Started as a Tiny Landlord
If you’re interested in becoming a tiny landlord, there are a few key steps you’ll need to take. Here are some practical tips to get you started:
1. Do your research. Before investing in a property, make sure you understand the local rental market. Look at rental rates for similar properties in the area, as well as vacancy rates and any trends that may affect the market in the future.
2. Calculate your costs. Before buying a property, make sure you have a realistic understanding of all the costs involved. This may include the purchase price of the property, any maintenance or renovation costs, property taxes, and any other ongoing expenses.
3. Find a property management system that works for you. As a tiny landlord, you may not need a full-fledged property management system, but you’ll still need some way to track your rental income and expenses, communicate with your tenants, and keep track of any maintenance requests or repairs needed. Consider using a property management software that is specifically designed for smaller-scale landlords.
4. Screen your tenants carefully. As a tiny landlord, you’ll want to make sure you rent to reliable, responsible tenants. Screen potential renters carefully, checking their credit history, rental history, and other relevant information.
5. Be prepared to handle maintenance and repairs. As a landlord, you’re responsible for maintaining your property and making any repairs necessary. Make sure you have a plan in place to handle these issues in a timely and cost-effective way.
Overall, being a tiny landlord can be a rewarding and profitable business for those who are willing to put in the time and effort required. While it may not be for everyone, it can be a great option for those who want more independence and control over their investments.