Is Being a Landlord Worth It?
Real estate has always been deemed a wise investment if you can afford it. However, all that glitters isn’t gold when it comes to being a landlord. The challenges require you to sacrifice a significant amount of your time and money. Comparing this aspect of real estate to its thriving market may make you think, “Is being a landlord worth it?” Well, in this article, we’ll help you get the answer by highlighting the pros and cons of being a landlord.
Is Being a Landlord Worth It?
Renting property to good tenants can generate a consistent income stream. It can also be a desirable option for building your business and expanding your real estate portfolio. However, there are a few downsides to it.
To find the answer to “Is being a landlord worth it?” let’s consider its advantages and disadvantages.
Pros of Being a Landlord
The following perks are why a lot of people will answer “Is being a landlord worth it?” with a definite yes:
Steady Income
Once your tenants sign a lease, you can count on getting a steady passive income every month. You will have to manage the property year-round, but the money won’t stop.
Property Appreciation
In the second quarter of 2023, the average value of an American house was $495,100. This value has only increased till now and continues to do so, justifying your decision to increase rent as well.
Tax Benefits
Landlords are eligible for many tax reductions related to their properties. The money you save on taxes can be used for costs like repairs, maintenance, insurance, mortgages, etc. This will help you keep your house pristine and even charge a premium for it.
Reliable Investment
There are always many people looking for houses to rent. This means that the chances of your house always being rented out are extremely high. This translates into a consistent, recurring income stream without any headaches.
Flexibility
A great thing about putting up property for rent is that you don’t always have to handle it yourself. You can just have a property manager handle all the stressful work for you. It means that after the initial investment, you can rest assured that your investment is protected and generating returns without any daily hassle.
Cons of Being a Landlord
Now that we’ve covered the positive side of being a landlord, let’s understand why some would answer “Is being a landlord worth it?” negatively.
Tenant Hassles
If you don’t have a property manager to communicate with tenants, dealing with them yourself can be a hassle. Some common problems you may face include late rent, addressing tenant complaints, and lease violations.
Repairs and Maintenance
Renting your house means constantly dealing with repairs and maintenance. These issues usually last all year round, requiring time and money. The total costs usually add up and lower the profits.
Regulatory and Legal Problems
Renting your property comes with a large number of legalities and regulations. If you are not well-versed in all of this and don’t know what to do in the event of a dispute, things can get tricky.
Financial Risk
Though houses for rent are always in demand, there are times when it’s hard to find suitable tenants. This period could last weeks or even months, leaving you without rent for the duration. This uncertainty can become really problematic if that particular property is your only or major source of income.
Conclusion
Like every business, being a landlord comes with advantages and disadvantages. However, the pros are too good to pass up if you can afford it. That’s why we would say that being a landlord is absolutely worth it.
