Have you ever considered becoming a landlord? Being a landlord has its pros and cons, and it can be difficult to choose between the two. Do you want to take the risk that an initial investment requires to reap the financial reward of a good investment? Becoming a landlord is a gamble, and only you can decide if it’s right for you. Consider the following pros and cons.
Cons: Initial Investment Cost
It isn’t cheap to become a landlord. To rent a property, you must own it. Buying a building takes cash, or a fierce certainty in your business venture. With luck and careful planning, most rental properties pay for themselves over time, since each unit brings in a monthly fee. However, the initial purchase can be a hefty debt to handle.
Cons: Light Income
Between mortgage payments and unexpected costs, you won’t make much income on your rental property. Much of your revenue goes towards mortgage payments, and some must go toward repairs, advertisements, and the salaries of any employees you hire. Once you’ve paid off a building, you’ll make a better profit; in the meantime, your property won’t make as much money as you hoped.
Cons: Emergency Repairs
When you run a rental property, you must be ready for unexpected repairs. When a dishwasher breaks down or the furnace stops working, you’re responsible for fixing them. Besides the cost of these repairs, many landlords find the 24/7 on-call aspects of the job discouraging.
Pros: Job Flexibility
Despite the cons of becoming a landlord, there are many pros, as well. When you work as a landlord, you can set your own schedule. Depending on how many properties you manage, you might work full time or part time, and you can limit your office hours to a certain time each week.
Pros: Rental Income
While your income may be uncertain a few months out of the year due to empty units, a rental property still brings income. Your income per property won’t be extensive, but if you make the most of what you have, you can live, make a profit, and invest in your future, with the same building. Rent covers the mortgage in most instances, and as long as you take advantage of a free tenant screening, you can fill your buildings with tenants who pay on time.
Pros: Property Value
Once you’ve paid off a building, you own a property that’s all yours. You might not have made an enormous income thus far, but you can now sell a well-maintained building for a profit, in a favorable housing market. This kind of property value juggling can be a great way to make huge bursts of income. Patience is key with this kind of risk, but it pays off for the careful investor.