Monument to David Berry, a good landlord of wh...

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One of the things that I see a lot of, especially with “unintended landlords” is a failure to look at the big picture.

And Unintended Landlord is a seller that is unable to sell their home and turns to renting it out in order to stem the cash flow blood-letting

I often see properties where the listed rental rate is too high.  Often, the rental rate sellers (landlords) are asking is based on their own financial needs… like the mortgage.  The bottom line is that the market and the mortgage might not be lined up.

And then a prospective renter comes along and offers a rate that is a little below their liking… maybe even a lot below their liking.  And it is rejected.  But let’s look at the bigger picture here.

Let’s say that the house payment is $1500/mo. and so the landlord is trying to cover it… and asking for $1500.mo for rent.  Along comes a possible renter offering $1250/mo for rent.  The landlord looks at the offer and rejects it… he doesn’t want to lose $250/mo.  But instead, he is losing $1500/mo. Maybe he can get it rented for more soon… but what if he can’t?  If the house sits vacant for 2 months, the landlord has lost the same amount of money as they would have in a year if they rented the house at $1250/mo.

This advice is ONLY for unintended landlords.  For those that are buying properties for the purpose of holding them as part of a rental portfolio… you should NOT have this problem.  If you do, you paid too much or you didn’t put enough down… or you need to renovate your property to increase its value on the rental market.  “Professional” landlords NEED to have properties that are cash-flow positive.

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