Many landlords start out handling one or two rental properties while working a full-time job, but want to focus more on managing their rental units. If you plan to transition from being a part-time landlord to a full-time one, this article will provide you with useful information.
Advantages of Being a Full-Time Landlord
Taking on the tasks of full-time landlords may not suit everyone, but it offers a lot of advantages.
Regular Cash Flow
Focusing on optimizing your rental income is the main goal of a full-time landlord. Committing full time to all their regular landlord duties ensures the cash flow is steady.
Flexible Lifestyle
As a full-time landlord, you have a degree of lifestyle flexibility that’s not accessible to part-time landlords.
Holding a regular job means your priority is adjusting to the work hours set by your boss and having a fixed schedule of work. You don’t have a lot of free time since vacation days are set per year for each employee.
Meanwhile, full-time landlords can go on two-hour lunch meals to get together with friends even during a work day. They can also enjoy a month-long holiday without breaking any company rules.
Tax Advantages
When you invest full-time in a rental property, there are tax savings that are available to landlords. You can enjoy property-associated deductions.
While part-time landlords can access these perks, full-time landlords can enjoy them wholly. You can use these tax advantages to install safety measures for your investment.
Tips to Smoothly Switch From Part-Time Landlord to Full-Time Landlord
It’s normal to feel anxious when resigning from a job to become a full-time landlord. However, the rewards can be far better in contrast to doing your landlord tasks on a part-time basis. You just need to ensure that the switch is done properly.
Here are great ways to make the switch easy:
Set Money Aside
As a full-time landlord, preparation is essential. What’s your time frame to make the switch? Is it a year or two from today? If so, start saving and building up a budget. Target an amount that covers three to six months of your cost of living.
It’s even better if you can save up funds equal to a year’s expenses if there are no other full-time income sources. If you do this, there’s little stress in case you encounter some issues with your rental properties.
Calculate how much you’re spending in a given month. Then, multiply this amount to a number of months or a year. List your priorities like food, shelter, transportation, and healthcare.
Expenses on entertainment and non-essential purchases can be trimmed down and adjusted. It’s vital to focus on your budget goal to make your full-time landlord goal a reality.
Increase Your Portfolio
Own two or more rental units before you decide to transition to a full-time landlord. This is to ensure that you make a sufficient rental income. Remember that a sudden turnover can occur so if you have another unit, you can still earn an income while actively marketing the vacant rental. But, keep in mind there are many marketing mistakes to avoid, especially when owning multiple properties.
Once you have several rental spaces, you can evaluate if the full-time landlord role fits you.
Find Mentors
If you’re new at full-time real estate and being a landlord, you need to be aware of the challenges. Having the support of the right network can make it manageable to face property problems. Partnering with experienced professionals can provide you with invaluable nuggets of wisdom when they share their expertise with you.
You’ll avoid committing some of the most common landlord mistakes. A mentor can provide worthwhile advice that addresses property issues and resolves them. This comes from their experience of being in real estate for a long time.
That’s why it's recommended to have a mentor, in order to extend opportunities. Mentors provide you with more resources than doing everything on your own.
Maintain Relationships
Even if you think you’ll never need your old job again, strive to leave on good terms. At present, you may not think you need a job reference from a previous company but maybe, in the future, you’ll be looking for a referral.
Avoid burning bridges and act professional at all times. Keeping a solid network is crucial for entrepreneurs. There may come a time that you may want to stop being a full-time landlord so it's best to maintain your professional network.
When you resign from your full-time work, it’s best to be straightforward and share your plans about the industry you’re focusing on. Upon learning, a few colleagues may show their support by sending referrals, good deals, additional resources, and introductions to potential mentors in real estate.
Seek Out Assistance
Full-time landlords must use their time to reach their financial goals. It might be good to consider hiring a property management company to oversee your rental spaces. Having a dedicated team with industry experience can help you allocate your best hours to growing your rental property portfolio.
A property manager has outstanding expertise so you won’t worry about managing the small and big property issues, including addressing tenant complaints, and meeting safety standards. You’ll still be able to generate passive income while concentrating on chasing great opportunities for increasing your property portfolio.
Landlords typically target investing one property each quarter of the year. In two years, you can obtain eight properties that can provide you with enough income to live on without depending on working at a full-time job that requires you to work for a minimum of eight hours each work day.
Partner with NFI Property Management Solutions
As a committed partner, NFI Property Management Solutions provides seamless solutions and dedicated support to help you achieve your investment goals. We provide superb marketing, tenant screening, property maintenance and more. Contact us today!