Owning real estate, for many, seems ideal as it provides a recurring income stream and allows for a relatively
painless accumulation of equity. Under the right circumstances, acquiring promising properties helps you prepare an ample retirement fund.
Renting out property can be a lucrative income source. However, the steady income stream comes with its share of drawbacks. We put together some things to consider when looking into becoming a landlord.
Some Things to Consider
Being a landlord requires lots of work and extra resources. As an owner of properties for rent, you will need to anticipate surprises as well as make a realistic assessment of the type of home you can afford. The reason is that most lending institutions require a larger amount of money down on rental properties than on single-family dwellings to be occupied by the owner. You will also need to allot extra budget for emergency repairs or for when renters miss their payment.
Before purchasing your first property, remember that being a landlord means more than taking care of the monthly expenses. It also entails asking your tenants for rent money and confronting them about any damage they have caused. As part of your landlord duties, you will also likely deal with occasional trouble or taking urgent calls for help.
An article published on realtytimes.com warns aspiring landlords that tenants might actually turn out to be lunatics. There are cases when they would refuse to pay their rent or even refuse to leave your property, and your only weapon is always to be prepared.
The Reward: Passive Income
While becoming a landlord is not easy and certainly not foolproof, the reward is satisfying. You become part of an industry that, according to the National Rent Report, has a year-over-year growth of 2.9%. The report noted that rents have increased compared to last year in 92 out of 100 of the largest cities in the US and that given such growth, it is not impossible for property owners to prosper.
Real estate is similar to investing in stocks, as they both mean that someone else is controlling your money. The difference is, however, when you invest in stocks, you may or may not get a reasonable return. With real estate investment, however, you can expect a “passive income.”
If you find the prospect of owning multiple properties for rent appealing but are worried about having to deal with problematic tenants or tedious property maintenance, you can always use the services of a reputable property manager.
Property managers can help you protect your investment and help you make the most revenue by taking care of responsibilities like finding you responsible tenants, determining the best monthly rate for your property, and making sure your home’s integrity and value stays intact.
Reputable property managers, such as those that work with propertymanagementfranchise.com, are also likely to have access to proprietary tools that help them accomplish otherwise tedious tasks faster and more accurately. The key is in finding a property management company that can help you achieve your revenue goals.