Saying “I Do” To Becoming A Landlord

I’m excited to announce my newest series on Later Ever After, my Real Estate Series!  Through this series I will outline my journey to becoming an accidental real estate investor, how I manage being a landlord and tips and tricks to navigate the job.  In my first post in the series I’m breaking down how becoming a newlywed started my journey on becoming a landlord.  

Saying “I Do” To Becoming A Landlord

When you get married, you get new things. A ring, a new last name and for some a new job title.  I loved my ring, changed my name (which turned out to be a whole emotional journey that I’ll fill you in on later) and got a new side hustle job title; Landlord.  It’s one I always anticipated receiving, but not one I fully embraced until a few months into it.  My husband, Mike, dabbled in real estate, which I knew when I first started dating him.  

Mike became an accidental real estate investor and grew into the role.  For unforeseen reasons he was unable to sell his first condo and wanted to move into a bigger place, so he ended up renting out his first condo and bought a bigger place.  He quickly realized that it was rather easy to make extra money every month for doing very little work and in turn someone else was paying down his mortgage. The more he thought about this the more it sounded like a no brainier to invest in real estate.  Slowly over time he acquired a few more properties and embraced being a landlord.  

Flash forward a few years and I enter the picture.

Being that I bought my first home when I was 25 I always thought I would own my condo for life.  Funny story, I actually told Mike that I wanted to keep my condo forever even if no one lived in it. I just loved it that much.  Obviously this was a bad idea and I can laugh at my statement now.

When we got engaged we decided that I would move into his place, as it was bigger. And in turn we would rent out my condo.  This idea scared me to death.  First of all, I couldn’t imagine anyone else living in my condo. Second, of all I was terrified of not finding a renter, having the unit sit empty and losing money on it.  I strongly considered selling it. However, I also knew my condo was in a booming area of Chicago and that my property could only go up in value.

 With a little convincing by Mike I decided to keep it and rent it out.  I was fortunate, in that I didn’t need the money from the sale of my condo to move into another condo.  If you are in a financial position to rent out a condo and purchase a new place, I strongly suggest you consider the option.  

Besides Mike’s words of wisdom on renting my condo, I made a pro/con list for selling vs. renting my condo.

 I believe that these four main objectives should be taken into consideration when deciding to sell or rent your property.

Location 

Is the condo you are thinking of renting in a desirable location? Is it in a popular area, with restaurants, shopping and multiple transportation options?

Condition of the Property

Is your place in good condition, it is up to date, does it have desirable finishes like granite or hardwood floors.

Money/Cashflow

What would be your potential cash flow a month on the property.  You will want to research other rental properties in the area to see what the going rate is.  A quick calculation to check the cash flow potential is rent less monthly expenses.  You’ll have to assess the amount and make sure it makes sense to you. However, I think if you make at least $200 a month on the place it makes sense.

Appreciation Potential 

Think ahead to potentially selling the property down the road what is the general ballpark you want to make due to appreciation.

Keep in mind that you already own the place.

So, having a renter provides you with extra cash flow a month. Also, it pays down your property at the same time, without any money out of your pocket.

Back to my condo, I ended up renting it right away, it was on the market for only 2 days! We got an email from the real estate agent on our honeymoon.  I was a little shocked it happened so quickly. But I also knew my condo was in a very desirable location and had desirable finishes.

 I signed the lease when we got back into town and the rest is history.  I’ve been renting it for 3 years now and got very lucky with the tenant.  Overall it’s been surprisingly very easy to maintain the condo, even when problems arise.  The amount of money I make per month (after paying mortgage, assessments, taxes and insurance) is worth the amount of time I spend “working” on it.  

Being a landlord isn’t for everyone. Also, I actually didn’t think it would be my thing either, but it turns out it’s not as bad as I thought it would be.  I take a very active role in managing our properties, in fact I’ve decided to write a book about it!  More to come soon. However, it’s a soup to nuts guide on managing properties. This includes real life examples of how to deal with tenants and problems with the property.  

If you are thinking of renting your place and have questions, let me know. I’m happy to help out when needed. Also, follow me on Instagram for more updates.