My Thoughts As A Landlord After 3.5 Years

If you’ve ever thought about owning real estate and becoming a landlord, this post will give you some insight into what to expect.

My Credentials

Before we dive into my thoughts on being a landlord after 3.5 years, I’d like to list some information about me. This may help you decide if my experience/perspective is valuable to you.

• African American (black)
• My first purchase was a duplex ($130k)
• Annual Income < $100k/yr
• Manage the property myself
• Received over $30k in rent so far
• Had no previous construction/real-estate experience

How it started

In 2019, me and my girlfriend were living in a 2 bedroom apartment about 35 minutes away from our friends and family. We decided we would move closer to our family and friends but couldn’t find any apartments or homes to rent that was in our price range and in a pretty safe area. This led us to consider purchasing a home.

While neither me nor my girlfriend felt financially stable enough to purchase a home – we started looking, and looking, and looking. We found it hard to find a property that we both felt comfortable with. Eventually, my girlfriend’s job got busy and she wasn’t able to continue looking for a place to move to (but she still wanted to move).

After months of searching, I found a place that, while not perfect (far from it) – would work “temporarily”. However, it came with 2 units: a tenant in one and another that needed to be completely remodeled before living in it (which I renovated and lived in – aka house hacking).

And that’s how I became a landlord.

Here’s how it’s going for me

Like most things in life, being a landlord comes with both good and bad moments but, after 3.5 years, I can say it’s been a positive experience overall. With that said, I’m going to talk about both the good and bad aspects of being a landlord based on my current experience and perspective.

Let’s start with the bad first.

Downsides of being a landlord

1. More responsibility

Becoming a landlord typically means owning property and renting it out.

This meant I was now responsible for both the property and the land. I also had to be available to make decisions regarding the property. 

Although a property manager can help free up your time, that comes at a cost — including both an upfront cost and decision-making that might not be in your best interest.

2. There is always someone looking to take advantage of you

A lot of people will take advantage of you unless you have the money, knowledge, and/or ability to prevent it. 

This includes contractors, real estate agents, tenants, property managers, and any other person you might hire to assist you. Now, this could be location-dependent but, in my experience, it seems like most people are looking for the easiest way to get ahead — instead of finding a mutually agreeable solution. 

Thankfully, I was able to learn how to do most things correctly myself from the internet and people I knew that had successfully owned a rental property for a while. 

Despite that, I’ve still been taken advantage of; all I could do in those situations is learn from my mistakes and try not to repeat them in the future.

3. Being great comes at a cost that may not be affordable

I had to be OK with just being an average landlord until I had a nice-sized financial buffer that could handle most expenses associated with my property. 

Because most things associated with being a great landlord also equal spending more money, the more I tried to go above and beyond — the less money I could save for the inevitable expenses. 

Had I gotten an amazing deal, this might not have been a problem.

However, as an inexperienced “investor”, I didn’t have enough knowledge or skills to secure an amazing deal. So I settled with just finding a profitable property.

Benefits of being a landlord

1. It’s lucrative in the long term. I’m building a savings account (equity) using the rent from my tenants.
   
2. I’m able to choose how I want to operate. For example, I can be as hands-on or passive as I like. I can maximize rental income and make better decisions by being hands-on but it requires my time. If I decide that I’d like to be more passive, I will make less money but have more free time to do other things.
   
3. My property’s value can appreciate – which basically means my equity has increased and now that money can be captured (sell the property) or borrowed against (refinance or HELOC).
   
4. I’m able to help (albeit with a small impact) the neighborhood in a positive manner.

How do I expect the future to go?

I’m still taking things slowly at the moment to avoid making huge mistakes but, I expect that being a landlord will become easier over time.

The lifespan of most home systems is relatively long compared to the time required to install them. This means that the frequency and severity of repairs should continue to decline. With that said, I’ll still have to save for the repairs and the possibility of a tenant destroying the property.

I’m also sure I’ll make a lot more mistakes as I continue going down this path. At 3.5 years, I’m still new to the “game”. Even though I try to learn from other people’s mistakes – I can’t avoid them entirely. I’m hoping that whatever my next mistake is, I have enough experience and/or money to make it ‘no big deal’.

Time will tell.

And if you’ve been thinking about purchasing a property to become a landlord, I’d recommend you try it. Like everything, there’s risk associated but you can reduce that risk by learning as much as you can and planning.

So don’t just “jump in and hope you can swim well.” But don’t forget, there’s risk associated with not doing it as well.