What Are The Two Types Of People Qualifying To Be Real Estate Landlords

We’re talking here about the qualities you should have as an investor in rented real estate. Simply put, there are two types of people who should be investors. Is the landlord an investment opportunity for you? That’s what you’re about to find out now.

Real estate landlord qualities

There are only two major categories of investors who are hundred-percent suitable for real estate investing:

• Those who’d like to hold something tangible.
• Those who are good with people and research.

The first type includes people who would like to see with their own eyes and touch with their own hands the thing, which they will have bought. A house, multi-family rented space, land plot, a car… Anything they can palpate seems for them something way more realistic than some “numbers on the screen”, which they get if they invest in some non-physical asset. The latter can be a stock, future, derivative, option, bond, share… In addition to that, a stock market is not a good place for many since it is highly unpredictable and volatile. However, when you touch the wall of a house you own or hold gold bullion in your hand, you know – this is real. And, to be honest, tangible things tend to be appreciated more than intangible ones. Once and if some computer bug or error happens (maybe, even as a result of a highly unpredictable Sun flare), all those computerized numbers can vanish, bringing chaos and devastation. But independently of computing powers and electricity itself, gold bullion will stay here. It does not want to eat, does not tarnish. The same as a house could stand for another 100 years.

Those of the second type are highly organized landlords, who are good in various calculations. They compute everything: the cost of buying and selling, cash flow, ROI, financing, IRV, security and insurance options, NOI, REDR, cash outlay, interest rates, COCR, and other things like that. For them, numbers are everything and they are very keen on keeping all the documents and records for various financial, taxation, reporting, and personal purposes. But they also shall be good in handling issues and requests of their tenants, which might include such issues as payment for property damages, evictions, breakages, fixings, upgrades, unclogging the clogged drains, repainting walls, extinguishing large and small fires, dealing with court sues, changing burned-out light bulbs, or cleaning the pool from vomiting of drunk tenants after their 100-people parties (should you allow). That is overwhelming for many, frankly speaking. But you could hire a managing company to deal with tenants while you will be working with numbers, which are pure, clean, and behave. Or, vice versa, if you’re bad at numbers but good at work with people being a real estate landlord, you could hire a bookkeeper.

Should I invest in real estate or should I invest in land?

If you belong to either of the two types of people described above and pondering “should I invest in real estate”, then, yes, this can be your thing.

But what about the scenario if you don’t fit any type but are still allured by amazing opportunities of investing in real estate? Well, there is a great option for you: investing in raw land!

Should I invest in land? That’s a question for a million dollars and here is some rock-solid reasoning that we can tip you with:

1. Vacant land doesn’t require you to deal with tenants. After you buy it, it’s simply there, behaving and not asking for any renovation, running, or improvement. You can’t break it, steal things from there, or deteriorate it (of course, if some company won’t spill chemical waste on it, turning it into Martial terrain).
2. You pay significantly less property tax on raw land, especially if there is nothing on it at all. In some countries and territories, there is zero land tax, to your further rejoice.
3. Your land can be upgraded with buildings and constructions on it, which you can build yourself or sell a land plot to a developer (gaining some fat of income on your fingers)
4. This is a truly passive income. Unlike long and tiresome hours of dealing with tenants and objects located on the land, raw land is actually a do-nothing investment. Simply buy it, hold it, and then sell it. Profit!

There is very little competition to buy land. Really.

Unlike any other type of resource, there won’t be any more land created. Our planet has a static capacity of the land. Period. Well, unless some new volcanic island appears but that’s nothing you would be interested in commercially. Even better – land is eaten by the rising sea level. And that even plays in your favor. Thus, doing this type of landlord investment, you buy something that will only have increasing demand (and price) over time (even in remote areas).