Buying investment rental property? It can be lucrative, but a survey of landlords identified challenges, with repairs/maintenance and tenant screening topping the list.
NEW YORK – Peak rental season is approaching, and a new set of landlords could be entering the market. Zillow economists predicted that 2023 would bring a surge in first-time landlords after record-low mortgage rates spurred increased investment in second homes in 2020 and 2021.
In March 2023, Zillow saw a 22% year-over-year increase in landlords listing their properties for the first time using Zillow Rental Manager (Zillow’s suite of free property management tools).
To provide insight into the commitment of managing a rental property to this new class of landlords, Zillow surveyed first-time and repeat landlords to learn what the most burdensome parts of the process are for them. The typical (median) landlord who completed the survey reported having two rental properties.
According to Zillow’s survey data, almost all landlords (92%) said repairs or maintenance were among the top three most demanding responsibilities of managing a rental property, and 40% considered it the No. 1 most burdensome.
Screening tenants (reading applications, completing background checks and credit checks) was a close second, with 71% of landlords reporting it among their top three most burdensome activities.
More than one-third of landlords (36%) said they wished they would have known how hard it would be to find reliable renters, and managing the rental (communicating with tenants, accounting, etc.) was more time-consuming than they had anticipated. Thirty-four percent also noted that they wished they would have known the leasing process (processing applications, scheduling tours, writing a lease, etc.) would take more effort than expected.
“Investing in a rental property can provide reliable income and housing for a renter who needs it, but it’s crucial for landlords to understand the responsibilities,” said Manny Garcia, a population scientist at Zillow. “Many landlords wish they had known more about the effort required to find tenants and keep the property in good condition.”
Copyright © 2023 BridgeTower Media; and © Copyright 2023, The Mecklenburg Times (Charlotte, NC). All rights reserved.