How to Transition from Part-Time to Full-Time Landlord
When first investing in real estate, most landlords opt to manage their rental on the side while working a full-time job. Juggling these responsibilities can be challenging, but at the end of the day, it can be worth it.
However, if you want to acquire more rental properties, you’ll have to transition from being a part-time to a full-time landlord.
Quitting your full-time job to manage your rental properties comes with many perks. But it can also take a significant toll on your finances, especially when you’re just starting. The best way to make this transition smoothly is to plan ahead.
At Halcyon Real Estate Services, we know what it takes to run a successful rental business in California. Keep reading for the best tips to become a full-time landlord.
The Benefits of Being a Full-Time Landlord
Leaving your day job to become a full-time landlord can seem like a risky move, but the payoff will be worth it. Being a full-time landlord comes with many benefits.
Passive Income
Focusing on your rental business full-time can help you maximize the cash flow from each one of your properties. Once you get a hang of it, you’ll be able to earn a significant stream of passive income each month with little effort.
Financial Freedom
When you become a full-time landlord, you become your own boss.
This means that you’re in complete control of your income and outgoings, so you can make it work to suit your financial situation best.
Lifestyle Flexibility
As you’ll be your own boss, you’ll be able to adjust your work hours to fit your lifestyle. This gives you plenty of time for other endeavors and activities. You work on your schedule!
Tax Advantages
Every expense for your rental counts as a business expense, which means that they’re tax-deductible. Additionally, as a full-time landlord, you can also enjoy several self-employment perks to save money, like home office deductions.
Wealth Growth
Owning one or more rental properties is a surefire way to grow your wealth over time. It’s no secret that real estate is one of the best investments. When you own a rental property, you build equity over time and if you ever decide to sell, there’s a good chance you’ll make a considerable profit.
Top Tips to Transition from Part-Time to Full-Time Landlord
Even if you own a successful rental property, transitioning from a part-time to a full-time landlord can be intimidating.
The key to a smooth transition is to plan ahead, especially if you are planning to become a long-distance landlord. Below are some tips that can help you!
Set Money Aside
When you first become a full-time landlord, it can significantly affect your finances, especially if you did not properly finance your investment property. That’s why it’s best to stockpile as much cash as you can beforehand. This way, you’ll have funds in case of an emergency.
You should be setting aside an amount of money that covers the regular bills for at least six months before becoming a full time landlord. But the more money you save, the better.
Create a Business Plan
As a full-time landlord, you’re completely dependent on your rental property income. Therefore, you must create a business plan to ensure your investment remains profitable year-round. Your business plan should include key elements such as:
- A company description
- Your business model and objectives
- The market you’re targeting
- Strategies to reach your goals
- A financial plan
Expand Your Real Estate Portfolio
While you can become a full-time landlord with only one rental property, it’s not ideal since your income might not be enough to sustain you. Plus, with only one rental, you can’t be sure that being a full-time landlord is right for you.
That’s why it’s best to make this transition once you have at least two or three properties.
Network
If you want your rental business to thrive, you need connections. Having mentors or contacts in your local real estate community goes a long way.
They can guide you to overcome challenges and give you access to deals and opportunities you otherwise wouldn’t have.
Find Reliable Contractors
As a full-time landlord, you’ll be responsible to take on any maintenance emergencies and repairs that come up. But sometimes, it’s best to let a professional handle issues. A DIY fix can become costly if things go wrong. That’s why it’s important to work with contractors.
Make sure to have at least two dependable names for each type of contractor on hand in case of an emergency. Additionally, it’s good to have the contact info for a real estate attorney in case you ever need to proceed with evictions or other legal action.
Partner with a Property Management Company
Managing your rental full-time doesn’t mean that you must do it all by yourself. Hiring a seasoned property management company is highly advised to help you with running your rental properties.
While they handle the day-to-day operations of your rentals, you can focus on other important aspects of your business, like acquiring new properties.
When it comes to managing renters in San Diego County, there’s no one better than Halcyon Real Estate! With our comprehensive property management services, we’ll help you maximize the return on your investment and embrace the change of going full time!
Bottom Line
Transitioning from part-time to full-time rental property management can be an exciting but intimidating process. Now that we’ve shared with you the best tips to make this transition stress-free, you can start planning your next steps!
If you have more questions about becoming a full-time landlord, contact Halcyon Real Estate Services! Our team of seasoned property managers is ready to help you turn your investment into a profitable rental business.
