To many people, being a landlord seems like a dream job. After all, all you have to do is buy the property, find somebody to live in it and watch the cash roll in, right?
The reality is that it is not that easy to be a commercial landlord. You will need to have a good grasp of landlord-tenant laws in your area and also understand accounting. According to Bankrate, success in real estate investment requires a long-term outlook, and many people benefit from using a real estate management service.
Keeping patient
Like many investments, you may need to hold on to commercial property for several years before it becomes profitable. Much also depends on luck and the tenants that you have. Having a rental property for 10 years with a single tenant is much easier than managing a rental property for the same amount of time with a different tenant each year.
Most of the time, you will need to hold on to a rental property for a long time to break even on a cash flow basis at a minimum. Particularly if you need to take out a mortgage to purchase your rental property, it may be decades before you see real profit.
Farming out the work
Even though a management company will eat between 6-10% of your rental income, some people benefit from farming out the work to a management company.
For instance, management companies will handle background checks on the tenants, ensure that the tenants sign their leases in a timely manner and will also collect the rent payments. This can also help ensure that you do not become too emotionally close to your tenants.
