January 24, 2020
Being a landlord may sound like easy money, but is it worth it? It can be a great way to invest and to make extra money, but it has its downfalls as well. We are exploring the pros and cons of renting out your house to help you decide if this is a good move for you.
PROS
Income
Typically speaking, real estate prices increase, so a property you buy now should make you money by the time you choose to sell it. If you have good tenants, their monthly rent will more than pay the mortgage on the property for you, while your property increases in value. This makes for a great long term profit which you can turn around and use for college or retirement. Make sure you are using a great realtor to help choose a property wisely with being a landlord in mind.
Time
Aside from some general duties of making sure your tenants are happy and your property stays in good shape, being a landlord doesn’t take a huge time commitment. There will, however, be weekends spent possibly cleaning and painting in between tenants moving in and moving out, and as other issues arise. Generally speaking though, landlords can maintain a full time job in addition to this. There are also property management companies you can hire to help.
Taxes
You can take advantage of some tax deductions as a landlord, since it is similar to owning a business. Some of these tax deductible expenses include mortgage interest, cleaning, accounting, and insurance.
Your Property, Your Rules
As long as your contract is signed and your rules follow the law, the terms are yours to set, including the price of rent.
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CONS
Price
In this case, to make big money you need to spend big money. Home ownership and renovations, if needed, come at a high cost. An older home may also come with repairs that you will be responsible for. Water damage, roof leaks, and safety code standards may take a chunk out of your renters monthly cheques, so be sure to keep money aside for these possible repairs.
Tenants
Many tenants are lovely, but there will always be the risk of getting a bad tenant. One who doesn’t pay on time, doesn’t care for the property, or violates the contract can be enough to scare some people away from being a landlord.
Laws
You will need to stay up to date with on housing laws to be sure that both you and your tenants are within your rights.
The Verdict
Landlords don’t necessarily have it easy, but it can absolutely be a great investment for your future. It is not an easy get-rich-quick scheme, and will take start up money and hard work. Use a realtor to help select a good property, stay on top of maintenance, and find great tenants, and you can be a very successful landlord.
Landlords don’t necessarily have it easy, but it can absolutely be a great investment for your future. It is not an easy get-rich-quick scheme, and will take start up money and hard work. Use a realtor to help select a good property, stay on top of maintenance, and find great tenants, and you can be a very successful landlord.
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