What You Need to Know Before Becoming a Landlord

Many people have the notion that becoming a landlord would be a great gig (my husband being one of them). How easy would it be to, instead of selling your current home, rent it to others while you buy or build a new home. It eliminates the stress of listing and selling, closing and all that goes along with trying to sell a home. Becoming a landlord seems simple enough, but before you make the leap there are three things you must first consider.

It’s Not Free Money in Your Pocket

Chances are good that you’re not about to rent your house for a significant amount more than the mortgage you have on it. Even if you haven’t a mortgage, the money you collect from rent has other jobs. For one, it needs to go into an account that allows you to afford the cost of anything that breaks while your tenants are in the home. You have to always have cash available to refund security deposits and you have to consider the many expensive legal obligations that might come your way as a landlord.

Distance Matters

If you don’t live near your rental property, you need someone to manage it. This is an additional expense you have to pay. You need someone you can pay to manage the property 24/7, from fixing leaks to calling plumbers and electricians. It has to be someone you can trust to protect your home and to keep your renters happy.

Finding Renters Isn’t Always Simple

Sure, many people want to rent. However, you might be shocked at how hard it is to find a renter you trust. You  might not want to rent to someone with a sketchy background check or credit check. You might not feel comfortable renting to people with numerous animals and you always have to worry that your renters will damage your home – it’s not, after all, theirs to care about.

Image via Thinkstock


Leave a Reply