Topic 05 · 5 min read
What Being a Landlord Involves
The part nobody puts in the brochure.
Owning is the easy half. The other half is finding tenants, screening them, writing a lease, collecting rent, fixing things, and following the rules that protect renters. You can do it yourself or pay a manager roughly eight to ten percent of the rent to do it for you.
What to know
- Screening is the whole game
- A careful tenant check — income, references, history — prevents most of the problems people blame on real estate.
- The lease is your rulebook
- It sets rent, deposits, who fixes what, and how either side ends the arrangement. Vague leases produce arguments.
- Rules apply to you
- Fair housing, deposit handling, notice periods, and habitability standards are law, not preference, and they vary by state and city.
- Records or it did not happen
- Rent received, money spent, receipts kept. Good records are what turn expenses into deductions at tax time.
The tax benefit
Management fees, advertising, legal help, and the mileage of driving to the property are ordinary costs of the rental activity and generally reduce its taxable income.
Worked example
Manager or not
On $1,600 rent, a manager costs about $150 a month. For an owner three states away, that fee usually buys more than it costs; for an owner two blocks away, maybe not.
Watch out for
- Evictions are slow and expensive everywhere.
- Renting to friends or family blurs the business and the relationship.
- Short-term rentals are a hospitality business, not a passive one.
Terms from this topic
LeaseScreeningSecurity depositProperty management
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