I am a landlord and investor who has been in the industry for over 10 years. I have seen a lot of changes, but one thing that you can learn from my experience is where I invest my money. I don't know about you, but I love investing in landlord-friendly areas. There's something to be said for the feeling of security that comes with knowing that tenants will be able to pay their rent on time and take care of your property. And if you're a landlord who is struggling to find good renters, investing in an area like this can help make things easier and more profitable for you too!
When you sign the lease with a tenant, you are giving control of your investment by handing over the property to your tenant for the time period of the lease. Therefore, you must know as the property owner and possible mortgage holder that you have legal recourse to take back control of your own property should a major issue appear and be able to get compensation if there were any damages.
Investing in landlord-friendly areas can be a great way to build your portfolio. There are many benefits of investing in these areas, including higher rental rates. Moreover, these markets also have an abundance of new construction projects, meaning more potential for growth. Landlord-friendly markets have a higher return on investment than other markets.
As you might know that, property issues are handled differently between landlords and tenants in different markets. I broadly classified the markets into two categories;
If you are not super careful while renting to a tenant who does want to pay, causes damages, or causes problems with the landlord or with neighbouring tenants in the property it can lead to huge headaches and monetary losses. Moreover, in the tenant-friendly regions, it has been far too easy for professional tenants to manipulate the legal system and rip off an individual who has invested in rental properties. Professional tenants pose a huge challenge for Landlords.
Rent control is a tenant-friendly policy and has been quite a controversial subject throughout the years, and it also has a huge impact on real estate investing. Rent control is a form of regulation and price control that limits the ability of a landlord to increase rental rates. This kind of rent regulation controls the amount landlords can charge when renting out an apartment unit. Tenants are typically more satisfied knowing their city is rent-controlled, whereas landlords and property owners are more liked to be discouraged due to the issue posed by bad tenants.
In tenant-friendly regions, rent control is much more stringent. Rent control is designed to tackle the continuous issues of housing affordability and allows for more economic diversity in a community. Due to rent control, some Landlords won’t be able to match high rental expenses with the lower rental income in rent-controlled areas. Moreover, it will also demotivate future investors from investing in rental properties due to concerns of weak return on investment. At the end of the day, it just might not be worth the risk for some.
Being a landlord is not for everyone. Rental properties come with significant risks, costs, and time commitments. It takes time and effort to learn the skills to manage those properties on an ongoing basis. Buying multifamily commercial property is a business, you are providing service by offering rental unit and your tenant is your customer.
And, as a business owner would not you like to be able to call all the shots on how to run your investment?
A rental portfolio can be built much more quickly in a landlord-friendly area due to the fact that you will have fewer hassles to deal with the tenants.
What markets do you focus on and why? Let us know below!
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