Everyone wants to make a little extra money, but what’s the best method? You’ve probably heard that real estate is a fantastic way to earn more income each month, so let’s look at what being a landlord entails. Read on to discover the pros and cons of becoming a landlord that you should know.
Pro: Extra Income
While flipping houses can earn you large chunks of extra change, managing a rental is a great way to gain consistent income each month. Once you get through the tenant-finding process, you can enjoy a sizable check every month for the foreseeable future.
Rental income is far from “passive.” Even though you may want to believe that you’ve finished your work once you have a tenant, they’ll soon prove you wrong. Not only do you need to set up a way for them to pay rent every month (and come up with a plan to acquire rent if your tenant misses their payment), but you’ll also need to find new tenants sooner or later.
The constant need to have a new tenant on the back burner can get stressful, especially if you haven’t found a candidate when one lease ends. Thankfully, if you choose the right property management company, it can handle all this for you, from tenant screening to collecting rent and filing evictions.
Rental properties come with significant tax benefits, so don’t neglect this opportunity! You can deduct business expenses if the property is owned by an LLC or company, you can deduct the depreciation value of the apartment, and you can deduct some maintenance expenses. These are all benefits you won’t get if you buy a house, fix it up, and flip it—you need to hold a property for a long time to enjoy tax deductions like those!
Now that you understand the pros and cons of becoming a landlord, consider a property management company to take some of the weight off your shoulders without sacrificing your passive income.