Financial Answer Center

It's Not Easy Being The Boss

Being organized is key. If you decide to take on the responsibility of being the landlord yourself, there could be a lot to keep track of depending on how many tenants you will be managing. Think of it as running your own business. Not only will you have to handle the record keeping, but you could also be held accountable for tenant safety as owner of the property.

SUGGESTION: Lawsuits are on the rise. As an owner/landlord your responsibilities and liability are not clear cut. The most important thing you can do is to make sure you have umbrella liability coverage to protect your personal assets. Through a separate policy, you can usually add additional liability protection to your existing homeowners' policy for a few hundred dollars per year. Consult with your insurance agent. Umbrella liability coverage does require underwriting and may not be available in certain situations.

If you still think you have the right temperament, stamina, and free time to manage your investment property, then you may want to make a go of it. Managing a small property such as a two-family home is not quite as difficult as managing a 20 unit apartment complex. Only you can evaluate your own limits.

SUGGESTION: The first property that you buy and manage should not be too far from your home. This will make it easier for you to keep tabs on it.