Pros and Cons of Being a Landlord

Are you considering investing in a rental property? Or, maybe you’re looking to move and are thinking about renting out your current home. There are many benefits to being a landlord. However, there are also some negative aspects that you’ll want to consider before deciding to rent your property. Below, we’ll go through the pros and cons of being a landlord so you can make an informed decision about whether it is for you.

Pros Associated with Being a Landlord

Additional Income Each Month

If you’re able to collect more on rent each month than you owe on your property, then you’ll be making money. This additional money each month will be extra income that you can use to offset some of your expenses. You may also decide to put your rental income into savings so it can accumulate for a rainy day.

Long-Term Profit

If you rent your property for multiple years, there are a few opportunities for long-term profit. Aside from the monthly income you’ll collect each month, the value of your property will likely increase over time. This means that if you decide to sell it after renting it for a number of years that you’ll likely receive more money for it than if you try to sell it now.

Flexibility of Being Your Own Boss

As a landlord you’ll be your own boss. You can set your hours, decide how many properties you want to rent out, and make decisions about your business. Within the limits of the law, you’ll also be able to decide who you want to rent your home to.

Cons Associated with Being a Landlord

Initial Expenses to get Your Property Ready

Most likely, before your property will be ready to rent out, there will be some work that needs to be done. First, you’ll have to make sure that everything in your home is up to code to ensure the safety of your renters. You’ll need business insurance as a landlord. You’ll also want to make sure that the home is fixed up and clean for renters. If you want to receive more money in rent each month, you might need to invest a little more initially to make your property more desirable to potential renters.

Potential Surprise Expenses

As a landlord, you are responsible for the upkeep of the property and attending to any issues that arise. You never know when the water heater is going to need to be replaced, when the roof may begin to leak, or when a major appliance will break. You’ll have to have money put aside to deal with these issues when they pop up.

Tenants who don’t Respect You or Your Property

There is always the risk that you’ll get bad tenants. They may not pay their rent on time, which could leave you in a tight spot for paying your mortgage. Some tenants may also cause expensive property damage that you’ll have to fix before you can rent your home out again.

As you can see, there are numerous pros and cons for you to consider before deciding whether to become a landlord. Ultimately, it’s your decision about what is best for you. Weigh the pros and cons and decide whether pursuing become a landlord is something you’d like to do. Learn more about being a landlord by reading these great books here.