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So You Think You Want to Be a Landlord
A rental property can be a cash cow, but it also comes with a lot of
responsibilities and the decision to become a landlord isn’t one to be taken
lightly. Make sure you’re cut out for it before taking the plunge. Here are things
to consider being a landlord before renting out your place:
Advantage of being a landlord
pros of being a landlord
Paying off your mortgage in about half the time: The extra income
generated is why most people decide to become landlords. The rent earned
can be used to cover your home’s monthly expenses. You can make
mortgage lump-sum payments with the money left over.
Building a nest egg: Once you’re mortgage-free, why stop renting? Start
savings toward your next goals, like early retirement or buying a standalone rental property.
Being the boss: Owning a rental property is like owning your own business
—and you’re in charge! You get to make all the important decisions—
setting the rent, marketing your property, and choosing the tenants.
Claiming tax deductions: Rental income must be reported on your tax
return. To help reduce your tax bill, deduct expenses related to your rental
property, including mortgage interest, home insurance, property tax, and
utilities.
Earning Sweat Equity
Are you handy around the house?
Roll up your sleeves and earn
yourself some sweat equity. Renos
and upgrades like refacing the kitchen
cabinets and installing a dishwasher
can boost your rental income
potential and property’s value.
Creating your own safety net: A tenant acts as a safety net—the rent is
like an extra paycheque coming in. It’s the perfect way to supplement your
income during maternity or paternity leave, or your severance pay after a
job loss. Tenants also help reduce the stress of being a first-time homebuyer
and carrying home on your own.
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Disadvantages of being a landlord
Cons of being a landlord
Sharing your personal space: Although
you won’t be living in the same unit
together, you may be sharing common areas,
such as the yard and laundry room. Make
sure you’re comfortable with just having
other people in the house. It can be
disruptive if your tenants are having guests
over at all hours of the day and playing loud music with bass. If you’re a
single female homeowner, will you be comfortable renting to male tenants?
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Handling tenants: Tenants aren’t a guaranteed income source. Your tenant
can stop paying their rent at any time, leaving you to carry your home on
your own. Tenants have many rights. You can’t just pack up your tenant’s
belongings and evict them, but there are ways to protect yourself (more on
this later).
Read More for more information: When You Owe Taxes then What Happens?
Dealing with emergencies: When you’re a landlord, be prepared to be on
call 24/ 7. There’s never a good time for a flooding basement or gas leak,
but if it happens at 3 a.m., you have to be ready to deal with it.
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Facing higher maintenance and repair costs: Although there are plenty
of excellent tenants out there, renters tend to not take the same pride in
ownership as homeowners. Be ready to spend more on maintenance and
repairs. You’ll want to keep your property in good shape to attract top dollar from renters and for when you sell one day. (And for your own
enjoyment too!)
Read More for more information: The Psychology of Debt: What Are The Psychology of Debt
cons of being a landlord, disadvantages of being a landlord, pros of being a landlord, advantage of being a landlord
cons of being a landlord, disadvantages of being a landlord, pros of being a landlord, advantage of being a landlord
FAQ
landlord noun [C] (OWNER)
a person or organization that owns a building or an area of land and is paid by other people for the use of it: The landlord had promised to redecorate the bedrooms before we moved in. Housing associations are the biggest landlords in this area. SMART Vocabulary: related words and phrases.
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