I recently had a tenant utter the phrase “greedy landlords”. Ironically, it was out of frustration for what was in fact a tiny rent increase of less than 3%, raising the rent to a rate still about $75 less than market value. It was one of those “no good deed goes unpunished” moments that property managers frequently experience. More about my philosophy of rent increases can be read in a previous blog post on that subject.
But for this article, I want to talk about just who in fact your landlord is if you’re an Austin Tenant living in a single family home. I don’t mean the identity of your property owner, but more generally, what caused the owner to own a home that needed to be rented.
Owners fall into the following general categories.
Pure Investor – These are pure investors who purchased the property from the outset as an income producing asset. Many have maxed out retirement plans, or simply lost faith in the stock market and need a way to invest. Investing in real estate is very risky, fraught with uncertainty and surprise expenses. But for those with the right attitude toward proper care of the property, holding longterm, and treating tenants fairly, it can be one of the best ways to build wealth. They also need to have the financial and emotional strength to weather the ups and downs of owning rental property. All of our “investor” owners fall into this category, else we don’t take them as clients. But most of our clients are in fact not “pure investors”. Most fall into one of the categories below.