Over my years being a young professional, I’ve learned that it’s wise to take some carefully thought-out and vetted risks with money. Investing is scary; we work hard for our money, and the thought of losing it in an investment that’s not performing well isn’t something we want to think about. However, money under a mattress won’t make you rich, in fact in might make you poor. With that mantra in mind, of being a risk mitigator, but still taking risks, Mrs. Money and I earlier this year took a risk and became landlords. We’ve got about 11 months under our belt, and I’d love to share our experience so far.

Why we decided to go for it

Growing up, my Dad worked for a property management company at the beach (not a bad place to grow up), so I was exposed early on to the idea of buying houses to rent out. My Dad always cautioned me to be careful with such an investment, as he saw first hand houses that didn’t work out for the landlords. Becoming a young professional, we set a goal to purchase a house together and worked to achieve it. It ended up being a great financial investment for us, as home prices in our neighborhood appreciated. We always knew that our house wasn’t our forever house, and with the expected arrival of BabyMoneyFinance, we decided to purchase more of a ‘longer-term’ (I don’t like the word ‘forever’) house. One of our good friends has some experience being a landlord (read my interview with him HERE) and he passed along a lot of positive experiences. We have some friends and family as well that spoke highly of being a landlord. So, although it was quite scary, we decided to give being a landlord a shot! 

Our plan was to put it on the market and see if we could get any tenants and try it for at least one lease period (were hoping for a year). We figured with a good housing market in our city that we could always sell later on if we decided we didn’t like being landlords. 

How we made it happen

We lived in our first house for about 4 years and had a great experience. We knew the house well and knew it was in good condition. The market was fairly competitive, and we knew we could get a fair price for it if we decided to sell. However, we were interested in becoming landlords so explored the idea of keeping it and renting it out. We had saved up a lot for our new house and both had good credit scores, so when it came time to purchase our new house, we were able to get approved for the loan without having to sell our old house. It was a little surreal but our years of being financially prudent (i.e. saving/investing) allowed us to qualify for a new loan. 

Once we were approved and found our house that we wanted to move into, we took some steps to get the house ready. We made sure it was very clean after moving out, made sure filters and lightbulbs were fresh and ready, and then took lots of pictures and started advertising. We put it on Zillow.com and Craigslist and very quickly started getting inquires. We found an application template that we started sending to tenants. We found a good site to conduct background checks and also got a copy of a lease template that a family member uses. With these official documents and applicants going through the process we were excited! Finally we found some great applicants that wanted the house and we sent them the lease which they signed! We then counter-signed and were landlords! After doing a move-in checklist with them, we handed over the keys and received the security deposit and first months rent! 

We did have a contingency plan in mind, and had factored in a few months of vacancy in our budget just in case. We also told ourselves that if it hadn’t been rented in 3 months that we would just attempt to sell the property. 

Highs and lows

We knew that being landlords wouldn’t just be as easy as collecting rent checks, and expected something to come up (it always does). 9 days into being landlords, we get an email from the new tenants that the upstairs tub was leaking through the ceiling downstairs. No good! To make matters worse, I was out of town on a business trip, so Mrs. Money had to help coordinate repairs. Although it took more money than we were hoping to spend right away, we got things fixed. A plumber fixed the leak and a dry wall repairman patched/painted the drywall ceiling. It was stressful but we got it fixed! As my buddy mentioned is his article – always expect something to come up as landlords. Thankfully after having lived there for 4 years, we knew the house pretty well, and can quickly fix anything small that comes up. We also live within 5 minutes, which is helpful in case anything goes wrong. 

It’s certainly work and it’s important to remember that. It’s critical that you stay firm to what was agreed upon in the lease and be fair. If rent is due on the 1^st, make sure it gets paid on the 1^st.  If you are supposed to cut the grass every other month, make sure you find the time. 

Outlook moving forward 

I feel cautiously optimistic about being a landlord, but don’t want to jinx it! There have definitely been so highs and some lows but we’ll keep a careful eye on things and continue hoping for the best but planning for a more realistic landlord experience. 

Check out my guide on the Home Buying Process