The Pros and Cons of Becoming a Landlord!
Becoming a Landlord definitely has its advantages and disadvantages. With any business, there is an upside and a down side. If you are considering the real estate business and becoming a landlord, here are a few things to think about.
Rent- One of the advantages is being able to receive your rent money month after month especially if you have a Section 8 tenant (Section 8 tenants are individuals who receive government assistant to pay a majority of the individuals rent) or you have someone renting from you that pays his or her rent. Many investors start out with one or two properties and after awhile, they began to expand and purchase more properties and rent them out. This creates a monthly cash flow for you to continue investing.
Time- Becoming a Landlord is a full time job without the time clock and desk. Because you work for yourself and you are not in an office full-time, this allows you to do other things and accomplish other goals. Of course, being a good landlord is key to the success of your business and this takes a great deal of work but the pleasure is that you don’t necessarily have to be in an office setting for 8 hours a day. Being able to set up your own office hours and coordinate your own schedule is the greatest part of being an entrepreneur.
Tax Advantage- Becoming a landlord has some considerable tax advantages. There are generous tax breaks offered to landlord who rent out their properties. If you’re a landlord, you can deduct mortgage interest and real estate taxes on rental properties. You can also write off all other operating expenses such as repairs and maintenance, utilities, landscaping etc.
On the Flip side, there are some disadvantages of becoming a landlord. Such as,
Responsible for the upkeep of the rental units- As a landlord, you will be responsible for the upkeep on all of the units that you are renting out. If you have a tenant that has plumbing problems, landscaping issues and other things that will need taken care of, you have to make yourself accessible and get things fixed right away. You want to be timely and professional in handling any maintenance issues on the property.
Not getting paid on time-Landlords depend on the rent to pay the mortgage and pay for other costs that come along with owning a rental property. If they don’t receive their rent on time, if at all, this could put the landlord in a bad position. Cold calling, stopping by the rental property and court drama are just a few of the things that can happen when your tenant doesn’t pay their rent. Becoming a landlord can mean becoming a debt collector!
Responsible for the safety of the tenants-As a landlord you will be responsible if something happens to your tenant due to your negligence. It is very important that you do all things by the book with promptness and professionalism.
These are just a few of the pros and cons to becoming a landlord. It is important that you do your research and receive the proper training so that you are able to reap the wonderful benefits of being a landlord!