Can You Own a Rental While Working Full Time?

Is a first rental realistic for someone with a full-time job? It is extremely realistic. I have owned and managed rentals while working full time. But I would not call it passive, and I would not plan on leaving your job early. Here is how I think about it. This is my experience, not advice for your situation.

It is semi-passive, not passive

Owning a rental as a landlord is real estate investing, and I consider it a semi-passive investment. I hear many people use the term passive money. I would not deem it that.

Passive is really collecting a dividend from a stock that you own, where you have no part in the operations. Or having a revenue share in something that already runs on autopilot.

Essentially, anything that requires you to pick up the phone, requires thinking, requires you to update systems, and makes you the sole person responsible for it can never be 100% passive. So I deem it semi-passive.

What the time really looks like

Maybe a couple of hours a week. Some months are very quiet. Other months feel like a part-time job.

That unevenness is the part to plan for. A quiet month can make it feel like the property runs itself, right up until several things come due at once.

Organize it like it is a job

I think the main thing is to make sure you organize it like it is a job. Because if not, it starts to feel like something that you are reacting to.

So put calendar holds on your own calendar, and on the calendar of anybody else on your team, when it is time to do the major tasks:

• Lease renewals
• Property inspections
• Rental certificate renewals
• Reviewing your insurance
• Planning repairs or upgrades

On rental certificates: some cities and counties require a rental license or registration, and the rules differ from place to place, so check what applies where your property is.

If you can get some type of calendar cadence going, it makes preparation much easier, and it does not feel like it is all hitting you at once.

Your paycheck is the cushion

Working full time allows you to still have cash flow to rely upon, without stressing the rental business out too early.

Oftentimes we romanticize the dream of having 10 to 15 rentals that each have net profits of $700 to $1,000 per month, after paying for all of the related expenses. The idea is that this creates enough semi-passive income for you to live your life without a full-time role.

I do not hold that to be true. It is possible. It is doable, and it has been done successfully by many investors before. But in large part, I see that the cash flow and net profits, especially in the early years, are not that black and white.

Having a full-time job gives you a cushion to navigate the unexpected. And it keeps you from trying to force living off the profits from the rentals too early on.

The first steps

On my first rental, the first steps were simple. I saved. I told my agent exactly what I was looking to do. I knew what the property had to have before I would make an offer. And I did good research on rents, and on how much of that would offset my mortgage and utilities.

Then treat it like a job from the first day you own it, with the calendar already set.

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