I have asked and been asked this question over and over again by friends. I know different people have different opinions on this and in this post, I wish to generate those opinions by briefly stating my views of what I believe are the differentiating factors.
According to http://www.thefreedictionary.com/landlord, a landlord is defined as:
- One that owns and rents land, buildings, or dwelling units.
- A man who runs a rooming house or an inn; an innkeeper
And what are his responsibilities? According to http://settlement.org/ontario (well, I live in Ontario), here are your responsibilities (I summarized them) if you are or wish to be a landlord:
- Keeping the home in good repair: You must repair and maintain the home, and obey provincial and city health, safety and maintenance standards. You are responsible for repairs even if the tenant knew about problems before agreeing to rent the home.
- Maintaining common areas: You are responsible for cleaning and maintaining the common or shared areas of the building, such as hallways and yards. You are also responsible for removing snow from driveways, walkways, etc.
- Providing access to vital services: You must provide access to hot and cold water, electricity, heat and fuel (e.g. natural gas). You cannot shut-off these services, even if the tenant has not paid rent. You may shut-off these services temporarily in order to make repairs. You and your tenant can agree that your tenant will pay for these services as a standard fee each month or based on what the tenant uses.
- Providing Heat: You must provide heat in the home from September 1 to June 15. During this period, the minimum temperature is 20C. Some cities and towns set additional requirements. You can check with your local government to find out more about minimum heat standards in your community.
- Providing documents: You must provide your tenant with a copy of the lease or tenancy agreement, and written notice of your legal name and address. If the tenant requests rent receipts, you must provide them. You cannot charge a fee for any of these documents.
Notice that all these are ‘active’ words-verbs used to describe the work of a landlord. A verb is a doing word.
In addition to these , he has to cope with mid night calls from tenants, handle lease documentations of boarding and onboarding of tenants, chase rent payments from late paying tenants, handle evictions, repairs and maintenance etc.
Well, count me out of all that! I will rather leave that to those specially trained and equipped to handle them, while I spend my time on the things that matter most to me….my family, friends and leisure: this is my target.
Let’s talk about the investor briefly:
According to http://www.investorwords.com/2630/investor.html#ixzz3lvQW5IZP, an investor is an individual who commits money to investment products with the expectation of financial returns.
His primary objectives are the returns from his investment. He is principally concerned with the numbers and invests with no emotions. He is focused and disciplined. If the numbers don’t make sense, he does not invest, period!
A landlord often has sentimental attachment to his house: its my first property, it reminds me of my childhood, I had and brought up my kids in this house; it must not be sold because my father bequeathed it to me….etc.
Ok. Let me take a pause here: frankly answer this question: Are you a landlord or an investor?