Want to be a Landlord? Here's some Pros and Cons
Updated: Sep 25, 2021
It takes a lot of work to become an effective landlord. It took years after buying into tenant’s excuses and miss-management of my properties, before I got the hang of it.
Making properties efficient and profitable takes initiative but it can become very lucrative if managed the right way.
Owning real estate is the top vehicle for many wealth builders, here's the pros and cons of owning investment properties:
This career does not require a real estate license. You can be a bona-fide landlord starting with just one rental property. You can hire a property management company to collect your rents and to maintain any repairs that are needed. A management company will usually charge up to 10% of the total rent collected.
You will gain great monthly residual income.The more rental properties you own, the more money you put into your pocket.As long as you manage your properties effectively, you will turn a great profit from your properties monthly. With Section 8 income or high paying professional tenants you will be laughing all the way to the bank and you can do this part time!
As a landlord you’ll receive excellent tax write-offs. You get to deduct everything you put into your property such as repairs, taxes, insurance, etc. Even though you are making a residual income every month, you get to deduct your expenses and depreciation of the property against your personal income. Make sure you keep good records and receipts and consult with a reputable accountant at tax time. You will see a noticeable difference in your tax returns for the better by having rental properties to write off. Even if a tenant does not pay you rent, you can still win by writing that off for a huge loss.
You must be capable of dealing with different types of personalities. Tenants can be a headache and a hassle, but that comes with the territory. Keep your relationships with your tenants professional and business like.
Your contractors and handyman can test your patience, as well. Set a payment schedule with your contractor and a timetable for completion. You do not want a simple repair job, such as a stopped-up toilet, for instance, inconvenience your tenant for a lengthy time period. Tenants get frustrated and will not want to pay the rent. Some tenants will even look for excuses to not pay the rent, and a delayed repair job can give them that excuse. When something needs repairing, have the work completed within 24 hours. If your contractor cannot accommodate you, look for another. Wasted time can cost you money.
Being a landlord is just as risky as real estate investing. A real estate investor is speculating for a positive turnover in the marketplace in order to maximize their profits. A real estate investor looks for short term turnover and a landlord looks for long term dollars. Buy wisely and you won’t get stuck in the end with a bad investment.
You have to spend money to make more money, so be prepared to invest in your rental properties. Shortcuts never makes it in this business.
Carl Agard is the Publisher and Editor in Chief of Boss XL Magazine and the Author of the new Book "Financially Surviving COVID19 (Finding Gems in the Real Estate Market)"
You Can Purchase the Book Here!!