1. Recognize that being a landlord is a business.
Being a landlord is different than being a private homeowner. It’s a business, and you need to treat it like one.
“Where I see a lot of people make mistakes is, they don’t have a good business plan,” Roberts says. “This type of investment is not hands-off. It’s not just a passive revenue stream. It requires involvement. It requires your time. It requires certain skills.”
Renting in America
Source: Rental Protection Agency, Zillow
Number of renters 112.9 million , Number of landlords 23.1 million, New renters per day 2,654 .New landlords per day 544 Average monthly rent $1,455.
Any property you buy has to make sense from a business perspective, not because it’s a house you’d like to live in.
That means it should be a reasonably priced home likely to appeal to the kind of tenants you’re looking for.
You’ll also need to be able to qualify for a loan.
Lending requirements for personal mortgages have relaxed in recent years, but Jim Merrill of Axel Mortgage Inc. in Phoenix says the requirements for rental property largely have remained the same.