What’s the Difference Between a Landlord and a Real Estate Investor?

The goals are the same, but the road to get there is quite different.

A landlord and an investor both acquire property to rent out for cash flow while the value increases over time. The tenant covers the costs while the net worth of the owner goes up.

The similarities end there.

The landlord is very hands on. They are cleaning, repairing and getting the property ready to be seen by potential tenants. Advertising, interviewing, back ground checks, obtaining the deposits, collecting rent, dealing with on-going maintenance and surprise issues, accounting rent and deposit funds. If the tenant falls behind, the landlord has to post notice at the property, initiate eviction proceedings and appear before the judge to obtain the eviction. Then begin the process all over again – get the property ready for a new tenant, advertise and find the tenant etc…

The real estate investor is very hands off. After buying the property, they may oversee the renovations and then turn everything over to a property manager who finds the tenants and takes care of the whole list of things needed to properly run a profitable rental property. The property manager may even oversee the renovations, allowing the investor to spend time on hobbies, vacations, or remain focused on their primary occupation.

The landlord knows that every time the phone rings, it could be a tenant calling with a plugged sink drain, notice they are moving out, or an excuse for why the rent will be late this month.

The investor knows that those calls will all be handled by the property manager.

The saying in real estate is that the money is made at the time of purchase. The strategies and concerns during the purchase are an entire topic for another time.

If you are contemplating investing in income-producing properties, talk to your favorite full-time licensed real estate professional for guidance specific to your situation and goals.

All the Best!

Jim Sweat, ABR, CLHMS, CRS, CDPE, GRI, e-PRO

Realtor

Re/Max Alliance Group

Mobile: 941-306-7384

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