Is Being a Landlord a Viable Business?

We’re only just out of a recession, and the housing market isn’t necessarily at its strongest, but there are huge numbers of people looking to purchase property with the sole intent of renting it out. In fact, according to recent figures in this article, in the UK, private landlords are soon to own more than a trillion pounds worth of property, which means that the market will be three times the size it was back in 2001. If things are like this in the current climate, then surely renting out property is a great business idea?

The short answer is that if you can afford the initial cost of purchasing properties, and have the time to manage things, it absolutely is. The simple fact is that assets that earn you money are far better than ones that cost. However, this is not to say it’s easy.

Do You Have What it Takes?

You do need some skills to make a success of things, because when you’ve got a salary to earn, there’s quite a lot of pressure to be earning a solid profit each and every month. It’s easy to think that you’ll have plenty of money coming in from tenants, but when you start adding things up, you’ll need to be making more than you might think. A couple of rented out houses is certainly not going to make you a living wage. It’s a great supplement, but not a business that you’re going to be able to live from and grow.

Some of the skills you’ll need are in terms of management – you need to keep track of what’s going on with everything, others are in marketing – you need to advertise and get tenants into the property, and others are simply in terms of trade skills – it’s better to be able to maintain and renovate properties yourself. Of course, simply knowing people with the right skills can be a real help, and it’s no coincidence that many successful landlords have family in similar trades.

Major Benefits

So if you’ve got all of these skills, what are the main benefits of being a landlord over another entrepreneurial endeavours?

Probably one of the best things is the security of making money from assets. Where you may be very vulnerable to changes in markets and industries when selling a product, there is always going to be a rental market. Prices and demand might fluctuate slightly, but things are generally very predictable. You main risks are properties that cost too much to run, whether this is because of problem tenants or frequent repairs. Experienced landlords can generally plan against this quite well, and this is what you’ll really need to learn if you’re to be successful.