SmartHomeOwners

One way many folks earn an additional income or even their primary income is by becoming a landlord.  Perhaps you're thinking of renting out an additional home that you own or buying investment properties for rental purposes such as condos, mobile homes or an apartment complex.  No matter how you go about it, being a landlord has advantages and disadvantages.  Here are some pros and cons to think about before diving into this new venture.

Landlord Advantages

One of the greatest advantages is the income that can be produced from rental properties.  You can potentially increase your income by improving on properties and renting them for more or by adding other properties to your assets.  You can also get to know some great people.  Although you don't actually have to oversee every aspect of a tenant's life, being a landlord allows you to meet people and it provides the opportunity to help others find a suitable place to live.  You can be a great landlord by always making sure the home/apartment is comfortable with all appliances and utilities working properly.  In doing so, you can reap the rewards and profits of having long-term tenants.

There are tax advantages as you can deduct expenses from your landlord income when you need to make repairs or buy items for the property.  Advertising your property through news ads, the Internet, etc. is also considered to be a business expense.  Also keep in mind that while you're renting the home or property, it will build value over time as you build equity.  For certain vacation rental properties, you can use the property for family getaways while renting it to other vacationers for the remainder of the year.

Disadvantages of Being a Landlord

Although the profits can be substantial, being a landlord isn't all fun and games.  You must select your tenants carefully. You'll be responsible for tenant interviews, credit and reference checks, and creating a rental or lease agreement.  You must make certain decisions such as whether or not to allow pets (indoors or outdoors), if the rent will include utilities, lawn care or other necessities, and what type of security deposit will be required.

Being a landlord means you are liable for most repairs to the home including plumbing, certain appliances, electrical and heating/air units.  You are also required to fix roof or floor leaks, rotted flooring, and broken fixtures.  Also consider if you are willing to take measures to evict someone that does not pay their rent as agreed.  You may encounter tenants with health problems or other financial emergencies, so you will need to determine how long you can allow them to miss their rent (if any length of time).  And remember...not all tenants are clean or friendly.  Some will trash your place while living there or when getting ready to move out!

These pros and cons should be considered before taking on the responsibility of becoming a landlord.  As you can see, being a landlord can be rewarding but also stressful at times.