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Benefits of Becoming a Landlord

Aug 17, 2007
A property is usually let out for rent in order to produce a steady flow of cash. To find out how this can be done optimally, you need to determine the amount of rent you can charge for your property. You can take the help of local listings of properties that are similar in quality and size to your property. You might also want to get in touch with rental agencies or other landlords.

However, you must not think of receiving a rental income for all the twelve months in the year. This is because the time of transition between tenants can take more than two months even if your property happens to be in high demand. The rate of vacancy is usually a hundred percent but this varies from region to region across the country. In fact it can vary based on the type of house too. For instance, luxury houses are more difficult to rent out since there are less people to afford them.

It is important to remember that you will not make pure profits out of your rental income. Mortgage payments, projected property taxes, utilities, insurance, maintenance and repair costs, property management fees etc need to be subtracted. If your house happens to be old or if it has undergone major repair work then their maintenance costs can be high. Becoming a landlord means you have to keep the house in a habitable condition.

A landlord incurs a lot of tax deductions. In fact sometimes they can claim so many deductions that it leads to a net loss. This is especially common with landlords who do not own many houses. This particularly happens in the first year of letting when the rate charges are low. However this is not a bad thing because you might be able to deduct this loss from salary or any other non rental incomes.

Another benefit of letting out a house is that when there is a rise in the value of the property you could earn a lot by selling it off. The proceeds from this sale can then be invested in other profitable ventures.

The best part of becoming a landlord is that you get to be your own boss. However, not everyone is suited for the job of a landlord. You should not enter this domain if you are not comfortable or not too enthusiastic to learn the tenant or landlord laws nor ready for dealings on a regular basis with tenants, local officials or contractors.

Though the benefits of becoming a landlord are many, your hands might be quite full once you decide to make a business out of this. So be prepared to give it your best shot. Another aspect to consider before you enter this arena is whether you are suited for this job. Becoming a landlord is no easy feat and you have to consider a lot of factors. However if you are comfortable with all the aspects that go into making a successful landlord, then this venture can be an extremely profitable proposition for you.
About the Author
James Klobasa, once broke with no job and $20,000 in debt made a choice that changed his life forever. That choice was investing in Real Estate. With the founder of, The Little Building Co. you too, can learn at Real-Real Estate Investing
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