You aren’t the type of person to make life decisions without a fair amount of research, so you wouldn’t choose to become a landlord without having all of your ducks in a row. Renting your property or investing in real estate may seem like a smart move but, as with any decision, is not one to be made lightly? Here are just a few of the pros and cons to becoming a landlord:
If you own your property outright, renting it out can be a fantastic source of income. Do understand, however, that if you are still making mortgage payments on that property, renting it out won’t make you a millionaire. No matter which situation you find yourself in, be sure that at least some of the rent money that you receive goes into an account that is dedicated to repairs and maintenance on the property.
2.Family Security Having a second property means that no family member will ever have to want for a place to live. A duplex is particularly useful in this situation, as is renting your property for six to 12 months at a time. If you have children in college, they can have their own place in the summer. If you have children that are just starting their own lives, they can have half of the duplex while you rent out the other half. The possibilities are endless when it comes to your family.
If you ever need to apply for a large loan, you can use your rental property as collateral. If you ever get into financial trouble, you can sell your rental property to settle your debts. For many people, knowing that there is a second property brings peace of mind. You may find that being a landlord is the perfect position for you and invest in more properties, increasing your net worth.
Being a landlord is not without a major investment of time. You will be the go-to person if something goes wrong with the property. You’ll have to spend a significant amount of time vetting potential tenants. If tenants move out, you’ll have to ready the property for new renters. Being a landlord should be considered a job, not a hobby. According to the author of “The ABCs of Real Estate Investing,” Ken McElroy, too many people who buy rental properties concentrate on the investment aspect of the property and forget it’s a business. If you don’t have the time for a second job, you don’t have the time to be a landlord.
5.The Bad Guy
Sometimes being a landlord puts you in the position of having to be the bad guy. If you don’t have the stomach for confrontation, you may want to look into another type of investment. No matter how stringently you vet your tenants, things happen. You may find yourself in the difficult position of having to evict a family from your property; will you be able to do it? If you’re the type of person who finds it difficult to say no, or the type of person who shrinks from confrontation, being a landlord may not be for you. As with every choice you make in life, you can’t make the choice to become a landlord without a great deal of forethought. There are pros and cons to every position you take in life. By weighing these, you’ll be better able to decide if becoming a landlord is the right choice for you.
Victoria Baines writes for real estate and investment blogs. If investing in real estate and being a landlord is something you are interested in doing, check out buytolet.net. You can find information on purchasing a property and find out if it’s worth becoming a landlord.