7 in 10 of all rental units are owned by individual investors. They have almost 14.3 million of the 48.2 million individual units in the US.
Most of them are mom-and-pop investors who want to buy and rent out a few properties to earn a bit of extra money. A few are known as accidental landlords. They get a new property thrust upon them by chance.
This situation can be great, but it can also be difficult to handle on your own. Read on to learn the pros and cons of being an accidental landlord.
What Is an Accidental Landlord?
An accidental landlord isn't looking to buy investment properties; they're looking to get out of a financial hole. They can't sell their home or afford the mortgage. This comes from circumstances such as:
- Losing a job
- Death or family changes
- Changes in the real estate market
Being an accidental landlord is a popular alternative to options such as foreclosure, financial loss, or moving to lower-cost housing.
Rental income can provide financial relief, and accidental landlords won't even have to even buy a new property to get it. It can give you enough money to make ends meet and pay debts that may have made you rent out your home in the first place.
A home burglary happens every 15 seconds in the US, and 72.4% occur when no one is home. Having a tenant gives you peace of mind to know that your home isn't as tempting of a target for thieves and vandals.
Renting is like a trial period and, if the tenant loves the property, they may decide to buy it. They'll be willing to pay a higher price, and their rent may even be enough to cover the mortgage.
Tenant screening is essential when becoming a landlord, whether by accident or on purpose. You may have a messy one that won't pay rent or doesn't keep up with maintenance. They can be a headache and make it difficult to sell the property later.
Property management is also difficult for accidental landlords, especially if their current home is far away. Watching everything that goes on and making sure that the building stays in shape is like a full-time job.
You may be tempted to do it yourself since the property is yours, but you'll regret not hiring a professional company. You'll lose time and miss out on their expertise. They can help you with legal issues, tenant screening, paperwork, and more.
Where to Find a Property Management Company
Traditional landlords rent out a property to make money on it. Accidental landlords rent out their homes after major life changes such as death, job changes, or inheritance.
It can be a profitable investment that keeps your home from going unoccupied. Your tenant may even later become your buyer.
Issues arise when you choose the wrong tenant. They can damage the property and make it difficult to sell. It's important not to try to manage it without professional help.
HomeRiver Group Sacramento is a property management company that assists all types of landlords. Contact us for help today.