Renting a property is a potentially lucrative business and, in theory, owning multiple properties to rent will increase the income potential. However, being a landlord is not without its challenges. This often comes as a surprise to those who are new landlords. The more properties you have, the more challenges you are likely to face. Therefore, making the decision to own multiple properties as rentals is something that you should not take lightly, and you should weigh up all the pros and cons. Many property experts believe there is a strong argument for not renting multiple properties, and here are some of the reasons.
1. The Vast Job Description
A mistake that many people make when they start out as a landlord is thinking that it is a job you can do part-time alongside another job and family commitments. Unfortunately. This is not something that most people can achieve as being a landlord involves more than one role. You become an agent for your property as you need to market it and take potential tenants for viewings. You are responsible for the upkeep and maintenance of the property and this involves either doing the work yourself or managing other professionals to complete jobs. It is also your responsibility to keep on top of financial transactions and commitments. you can multiply these jobs by the number of properties you own.
2. Time Consuming
Often, people think that being a landlord is a way of making money with no time commitment from themselves. This is not the case as renting properties is extremely time-consuming. When your property is empty, you will spend your time on making sure the property is up to a reasonable standard and finding tenants for the property. When your property is occupied, you will potentially spend lots of time resolving issues with tenants and organizing maintenance of the properties. The more properties you own, the more time you will need to commit.
3. Objectivity is Difficult
Even with one property to rent, objectivity is difficult. If you have spent time and money investing in a property and renovating it ready for the rental market, you can develop an emotional attachment. This makes it difficult to make objective decisions regarding choosing tenants and finances. Objectivity is even more difficult if you have multiple properties. A lack of objectivity limits a landlord’s ability to profit from their property ventures.
4. It is Mentally Draining
Many landlords find renting properties a mentally draining process and there are many reasons why this job is so stressful. Financial pressure is one of the biggest issues that causes landlords stress. They often worry about making the mortgage repayments when the property is empty and the cost of any maintenance or repairs that they need to cover. Problems with tenants is another huge cause of stress. There are various situations relating to tenants that can arise and may cause a landlord a great deal of stress, and the more tenants you have, the more potential there is for you to face these challenges. The situations can include anything from tenants damaging your property to tenants that are not paying the rent. Other situations can include tenants making complaints about the property or requesting urgent repairs or maintenance.
5. There Are Many Risks
Becoming a landlord of multiple properties is not for the risk-averse as there are many risks attached to buying properties to rent. One of the greatest of these is the potential for a crash in the property market that creates negative equity. This means that you will potentially lose money when comes to selling on the properties. Another risk is a lack of occupancy. If there are gaps between one set of tenants moving out and another set moving in, then you may not reach the profits that you hope to achieve. This is particularly problematic if your properties are mortgaged because you must still pay the mortgage even if you are receiving no rental income. Finally, there are physical dangers that you may face in your work as a landlord and these risks increase in line with the number of properties you own. These risks can vary from safety issues while renovating a property to the risk of abuse from bad tenants if there is any conflict.