Becoming a landlord is an option worth looking at if one is looking for a second source of income. Owning and managing a rental property is not an easy job. Landlord and tenant rights must be fully understood in order to make it work. Being a landlord comes with its fair share of risks and benefits which must be well analyzed before renting out your property.
Some of the advantages of becoming a landlord include:
Constant income stream – if your properties are rented out, your income will flow in steadily every month. Once you’ve stabilized one property, you could increase the number of properties, creating a steady income stream based on each property.
Freedom – being a landlord doesn’t entail a lot of work, except collecting the rent. You can always hire others to complete maintenance work of the properties.
Collateral – your properties can be used as collateral if you ever need to take out a substantial loan.
Disadvantages include:
Upkeep of rental units – if renting out an old property, you will be faced with constant fixing and other issues. You can cut back on them by investing and obtaining a new property.
Delayed payments – tenants late on their rent will amount to bad cash flow problems, turning you into an avid debt collector.
Responsible for safety of tenants – if something happens to your tenants due to your negligence, you are responsible. It is important to do what is needed by a landlord and ensure your properties are always in good shape.