In real estate and property management, we have terms related to owning a rental property. Some would call it property management slang or rental property terminology, but as a professional property manager, I call it an excellent opportunity (hint: Accidental Landlord).
Accidental Landlords have an excellent opportunity to be pushed, forced, or didn’t expect to own an income-producing asset. Regardless, earning rental income is a bonus, especially when you didn’t anticipate it.
One fantastic thing about owning a rental property is that no matter how experienced you are, each rental property owner has their own story on how they became a landlord owning a rental investment property.
What is an accidental landlord?
An accidental landlord ends up renting the property they did not expect or anticipate. The meaning is exactly what it sounds like; a person becomes a landlord by accident.
There is no one way a person becomes an accidental landlord; life happens, and change occurs.
An accidental landlord backstory
Tim and Nancy just moved into their newly purchased 4 Bedroom, 2 Bathroom Florida pool home. They were excited to get their family settled into their new life finally. Then out of nowhere, Tim’s employer notified him that they were transferring him to the west coast.
“They instantly thought, oh no, what are we going to do with our new house? We just bought it at the height of the market”
Instead of selling the home for a loss, they decided they would need to rent it out. So congratulations, Tim and Nancy just became accidental landlords!
Most common reasons a person becomes an accidental landlord
Not all rental property owners set out to own an investment property for only financial reasons. Each rental property owner has their own story and reasoning behind renting their property. The most common reasons people become an accidental landlords are:
- Job relocation or a new job
- Financial changes
- Death in the family
- Familial changes
- Real estate market shifts
- Slow sales market
Positives of being an accidental landlord
Just like in life, sometimes something unexpected turns into an excellent opportunity. Becoming an accidental landlord can be a wise financial decision. Some favorable aspects of owning a rental property include:
- Additional income stream
- Passive income (if you hire a property manager)
- Someone else paying your mortgage
- Property appreciation & equity growth
- You still own the asset
Negatives of being an accidental landlord
- Renting is not always easy (if self-managing)
- Funds tied up in the property (liquidity)
- Emotional ties to the property
Two Common Accidental Landlord Options: Rent or Sell?
You’ve likely weighed your options if you’ve become an accidental landlord. As a professional property management company, we find that property owners typically face two options on what to do with their property.
Option 1. Sell my property or sell my property for a loss
- Sometimes it may be easier just to sell your property rather than rent it out. But, if you just purchased a home and need to sell, you may have to take a loss on that property. We genuinely believe you should never lose money owning real estate, especially if you rent it out.
Option 2. Rent my property
- Renting your property has many more benefits than negatives. Some excellent reasons to rent your property include earning passive income, property appreciation, additional income, and long-term wealth.
Is becoming an accidental investor a good thing?
It is a fantastic thing. However, owning a rental property can be very beneficial if you know what you’re doing or hire a professional property manager.
There are many more positives to becoming an accidental investor. The most important thing is how you want to find a quality tenant. If you have never screened a prospective tenant or rented your property before, it may be best to seek the advice of a property management company.
Property Management Summary
If you have recently become an accidental or first-time landlord, you’ve got an excellent opportunity to be successful and enjoy owning a rental property.
If you own a property in Orlando, Florida, and want to learn about our property management services, please contact our property management team today!
At The Listing, we are your trusted boutique Orlando property management company.