1. You Don’t Enjoy Dealing with People: As a rental property owner, you will have to deal with renters, neighbors, real estate agents, contractors, and several others. These people may be difficult to work with. If dealing with people is not something that interests you, rental property ownership might not be the best fit for you.
2. You Don’t Have Good Communication Skills: Communication is vital in rental property ownership, and it’s vital that you can effectively communicate with renters, neighbors, mortgage lenders, real estate agents, contractors, etc. If you don’t have strong communication skills or if talking to people does not come naturally to you, rental property ownership might not be the best option.
3. You Don’t Like to Follow Rules: As a rental property owner, there are specific laws and regulations that must be followed. This can include health department and zoning laws, landlord/tenant laws, building codes, etc. If you don’t like following rules or would rather do things your own way, rental property ownership is probably not for you.
4. You Don’t Like Dealing with Paperwork: Rental properties require a lot of paperwork, such as rental agreements, applications, insurance contracts, etc. If you don’t like dealing with paperwork or filling out forms, rental property ownership may not be your best option.
5. You Don’t Have the Time: Purchasing and owning rental property requires a significant amount of time and effort. This includes activities like property searches, repairs and maintenance, finding tenants, maintaining positive tenant relations, managing contracts and rental payments, and much more. If you don’t have the time or energy to dedicate to rental property ownership, choosing another occupation is probably best.
6. You’re Not Ready to Take Risks: Although safer than some, there are still risks associated with real estate investment, and there is always the potential for a financial loss. If you’re not prepared to take on this risk, or if losing money would be a damaging blow, rental property ownership might not be for you.
7. You Want Instant Gratification: Investing in rental properties requires a long-term commitment, and it can take many years before you begin to turn a profit. In fact, the biggest payoff from rental properties is long-term appreciation and rising rents. If you’re looking for quick returns or instant gratification, rental property ownership may not be for you.
8. You Don’t Have A Backup Plan: As with any investment, there is always a risk of loss when it comes to rental property. It’s essential to have a backup plan if things don’t go corresponding to plan. Make sure you have savings set aside to cover potential losses if something goes wrong.
9. You Don’t Have Enough Experience: While you don’t need to know everything about rental property investing when you first start, a lack of knowledge and experience on the subject is a distinct disadvantage. There is a steep learning curve for new rental property owners, one that will require time and effort to overcome. Before investing in rental property, ensure you have the time and means to acquire the necessary knowledge and experience to make it a successful venture.
10. You Don’t Have the Right Team of Professionals: Having the right team of professionals to help you with rental property ownership is essential. This includes a real estate agent, accountant, lawyer, and property manager, among others. The right Eagan property management company, in particular, can defeat many limitations and help more people realize successful rental property ownership. Without local rental market experts on your team, you may find that rental property investing isn’t what you hoped it would be.
Rental property investing can be a great way to generate rental income, build wealth, and secure financial freedom. But it may not be the best option for everyone. It’s important to consider all the factors before you decide if rental property ownership is right for you. Be honest with yourself before making any costly mistakes.
Hiring a professional property management company like Real Property Management Fidelis can solve most of the issues listed here. If you’re on the fence about starting a rental property investment career, feel free to call the office or contact us online, and we’ll be happy to discuss your options.