The Skills and Resources You Need as a Landlord
You’re probably already aware that being a landlord of homes for rent in Kona requires a bit of monetary management. But landlording is complicated for many reasons, not just financial ones. Just a few simple skills and resources can completely transform landlording from a headache into an enjoyable and profitable profession. This week we explore a few of the simple skills and personal attributes necessary for becoming a successful landlord of homes for rent in Kona and all over the country.
Accounting and Money Management
Perhaps the most essential components of successful real estate investing in homes for rent in Kona are good accounting and money management skills. From the beginning, making pristine monetary calculations is critical.
When you purchase your investment property, you must first ascertain whether or not the stipulated price is profitable and fair. Then, in order to determine whether it will be a profitable venture, you must calculate how much you can expect to collect in rental income each month. Doing so will require extensive research. You must seek to understand your local market, the amenities your tenants will value, the average price of similar properties, and whether or not there are repairs you can make that will drive up this value and increase your income.
Once you’ve run those numbers and determined that your rental income will exceed your mortgage by a profitable margin, you must account for things like maintenance, vacancies, and unexpected expenses. If you are particularly savvy, you may also seek to anticipate how your income will change with appreciation and market fluctuations. Consulting with a realtor or mentor can go a long way in helping you gauge and calculate your numbers properly.
Don’t be intimidated if you have very little experience in calculating these figures. The ability to effectively calculate and manage your expenses in your personal life is a strong predictor of your success in the financial aspects of real estate. It’s critical to have sufficient cash reserves as well. Your finances may end up looking very different than you initially calculated.
Acceptance
Acceptance is more the result of years of personal development than it is a specialized investing skill. Nonetheless, it is critical for your success, and sanity, in managing homes for rent in Kona. Being a landlord tends to mean constant curveballs and unpleasant surprises. Tenants may move out and leave behind unanticipated damages, both functional and aesthetic. Changes in the local or national economy may impact property taxes and market values. Tenants may break their lease agreements, leaving you stranded and bleeding cash. Unfortunately, there are a lot of things that can go wrong.
Those who have the tendency to dwell on what they wish had not happened will find themselves hard pressed to effectively cope with the stresses of becoming a landlord of homes for rent in Kona. The ability to indifferently accept whatever comes your way grants you the ability to look forward with a problem-solving mind instead of dwelling upon the past with regret. Acceptance therefore not only keeps you forward thinking; it also prevents you from accumulating emotional baggage that can interfere with work and personal life.
Repair Skills
Very few landlords perform all maintenance and repairs themselves. In fact, we actually dissuade investors from attempting to be both the repairman and the landlord. Doing so is likely to require a very broad skill set, one that takes years to accumulate. You don’t want to be going through this learning process while the person whom you rely upon for income in turn relies upon you to keep their home comfortable and safe. When in doubt, hire a contractor. Developing a strong, personal relationship with a contractor will go a long way in securing your long-term financial success.
However, it would do you well to master a few basic repair skills. It is much easier and more financially savvy to perform frequent, insignificant repairs yourself than to continually perform the logistical maneuvering necessary to pay a repairman. Plus, it will save you a lot of time and stress.
Important skills to inquire include: patching drywall, gardening, painting, cleaning, changing air filters, fixing toilets, and unclogging drains.
Reliable Transportation
Having reliable transportation is a must for landlords. No one wants their car to break down on the way to meet a tenant or to continually take a bus across town. Having a reliable, personally owned vehicle is your best bet for headache-free landlording.
You are bound to have to travel back and forth between your own home and your investment as a landlord. And you will probably have to do so more often than you are anticipating. If a tenant experiences a lock out or break in in the middle of the night, you do not want to be stranded on the highway or put yourself at risk on public transportation (which, in some areas, may not be available).
You also want to ensure that your vehicle is somewhat spacious, as you may have to transport building materials and amenities between properties. Note, too, that more durable vehicles have lower insurance premiums.
Confidence
Confidence is critical in every aspect of life, but it is especially important when you’re in a real estate field. Your personal relationships with your tenants will heavily impact tenant retention. Your self-esteem and general demeanor will make just as much of an impression on your tenants as the home itself. Humans are naturally inclined to make decisions not just based on practical analysis, but also on intuition and feeling. If your prospective tenants detect hostility, poor confidence, or judgment from you, it doesn’t matter how stellar your property is; they simply won’t want it.
It is important to note that confidence alone won’t sell a property. Humility and an amicable nature are equally important. The combination of these three attributes will help you market not only homes for rent in Kona, but yourself as a landlord.