FAQ for Getting Started

Q. Is it hard to get into the landlord business?

A. Well, that all depends upon your definition of “hard.” It does take considerable homework and preparation to do well and to last over the long haul. Investing in rental real estate is not a quick fix for anyone who wants a speedy return on their money. However, if you have the temperament and resources, becoming a landlord can really be a terrific way to build wealth over time. It’s also important to be wary of television shows or articles on the internet that make it seem like investing in real estate in no more complicated than going shopping for groceries. Remember, if something sounds almost too good to be true, it more than likely is.

Q. How much money will I need to put down when buying a property for rental?

A. That varies from place to place and depends on many factors, too many to enumerate here. However, it is typical to see bank asking for anywhere from 25% to 40% down when purchasing rental property. In addition, interest rates are usually higher than for purchases of strictly residential property because as far as the banks are concerned, this is a higher risk venture. People are more likely to walk away from a bad investment and leave the bank holding the bag than will abandon their home.

Q. Can I become a landlord with only one property?

A. Absolutely, yes! In many ways starting off small and growing is a smart way to get into the rental business. It can also be easier for new investors to get loans if you are willing to live in one of the units in the building you are planning on buying. Better to have your learning curve with one property at stake not several.

Q. Is it better to do all the work myself on my rental property or should I hire someone to do everything?

A. That all depends on you. If you’re handy then by all means, tackle some of those projects your investment property needs done. On the other hand, if your skills with a hammer resemble something from America’s Funniest Home Videos, then perhaps a telephone call to a good contractor will serve you better. Do what you know how to do well, whether it’s repairs or painting or book keeping. What you can’t do, hire it out to a qualified service provider.