The American Dream has often been synonymous with housing. Until recently, it was defined buying a single-family home, planting roots, and building wealth through stability. But with affordability stretched to its breaking point, a new version of the dream has emerged: becoming a landlord.
The rise of the “DIY landlord” is one of the biggest wealth trends of the decade. First-time buyers, priced out of traditional homeownership, are increasingly looking at real estate as an income stream instead of just a place to live. Platforms like BiggerPockets made side hustling with property culturally mainstream, and now millions of individuals are buying homes specifically to rent them out.
But here is the catch: most will fail.
A 2024 study by Clever Real Estate found that 90% of first-time landlords lose money on their investment. Nearly half lose over $200,000 on a single property. In an era where housing affordability is already under pressure, those kinds of losses are devastating. The rise of the DIY landlord can be seen as either the next great wealth boom, or one of the riskiest bets in personal finance.
Why Everyone Wants to Be a Landlord
The backdrop is easy to understand. Today’s homebuyers are fighting uphill battles against low inventory, high interest rates, and inflated prices. The median-priced U.S. home costs about $438,000, which would require a household income of $123,000 to purchase comfortably. But the median U.S. household makes only $77,00. This represents a gap of more than $45,000.
Faced with that reality, buyers are stretching. According to Clever, 82% of home buyers made compromises when purchasing a property. Nearly one in three say they feel in over their heads financially since closing, and two-thirds report regrets.
That regret is fueling a new playbook: treat real estate as a business. Instead of buying a dream home, many Americans are buying “income homes.” These are properties intended to cover their mortgage through rent and, ideally, deliver cash flow. It is a strategy with enormous upside if executed correctly.
Why Most Landlords Fail
So why do so many lose money? The short answer: being a landlord is harder than it looks.The short answer: being a landlord is harder than it looks.
Operational gaps are a big part of the problem. As Joanna Hackney, a former multifamily operations executive and founder of the proptech advisory Linea, explains:
“Across the multifamily industry, up to 60% of leasing inquiries via phone can go unanswered. In a competitive housing market, that is more than just a service gap. It is a lost opportunity to connect families with a place to live and lost revenue for owners.”
Those missed calls translate into longer vacancies and weaker returns. But that is just one challenge. Many first-time landlords treat their property like a side hustle rather than a business. They miss tax deductions, fail to track expenses, or underestimate insurance needs. And when an unbudgeted maintenance shock like a plumbing leak occurs, margins collapse.
Hackney emphasizes that even beyond leasing, landlords often stumble on the basics of resident experience, “Operators are so overburdened with administrative work that they are missing critical milestones in the resident journey, and in today’s rental landscape, those moments matter more than ever.”
Without systems in place, even one vacancy or unexpected expense can turn a rental into a loss.
The Rise of Landlord Tech
This is where a new generation of property management platforms is stepping in. Companies like Baselane are building tools designed specifically for independent landlords with small portfolios. No small feat, as this represents the fastest-growing segment of the rental market.
As co-founder Mathias Korder explains, “Our mission is to empower the next generation of individual real estate investors while also helping established investors thrive. Around 40% of our customers are just starting their real estate journey. There’s a long list of new skills and tasks they need to tackle — from banking and expense management to bookkeeping, tax prep, rent collection, and insurance. Baselane guides them through this setup with a single, integrated platform.”
That push toward automation is accelerating. Baselane recently announced a $34 million funding round led by Thomvest Ventures, alongside Matrix Partners, Starwood Capital, and others. The round coincided with the debut of Baselane Smart, a subscription-based suite of AI-powered tools designed to reduce financial busywork and help landlords save between 5 to 12 hours a week on manual bookkeeping while maintaining deeper oversight. The company says it has already saved the average investor more than 150 hours and $5,000 per year.
This “all-in-one” model sets Baselane apart from peers like Stessa (expense tracking), Mynd (property management services), and Roofstock (rental marketplace). While competitors target slices of the landlord journey, Baselane’s bet is that consolidation across banking, bookkeeping, payments, and now AI automation, is what will ultimately win.
The need for tools like these is underscored by America’s ownership divide. According to Pew Research, just 20% of Black households and 19.7% of Hispanic households own their homes, compared with 75% of White households. That ownership gap directly translates into a wealth gap, since homeownership and rental income have long been cornerstones of middle-class wealth creation.
The broader implication is clear: if real estate investing is to remain a path to wealth for middle-class Americans for communities historically excluded from ownership, technology will have to do the heavy lifting.
Winners, Losers, and What Comes Next for Landlords
The winners of this shift will be the landlords who treat their portfolios like businesses, That meanas leveraging technology, staying disciplined about costs, and operating with transparency.
The losers in this cycle will be undisciplined landlords who rely on luck rather than preparation. The era of real estate gurus touting BRRR as a universal playbook is over. In most markets, refinancing through HELOCs and scaling aggressively no longer pencils out. Many of these owners will struggle, especially if interest rates remain elevated and vacancies increase. For them, being a landlord will feel less like a wealth-building strategy and more like a second job with no benefits.
Platforms like Baselane offer a glimpse of an alternate path, one in which technology assists in professionalizing mom-and-pop real estate.
The real test is whether landlords will actually use them.