So You Want To Be A Landlord Just say the phrase "rental property" and people's eyes light up. Everyone knows that rentals have the potential to generate income above and beyond the cost of carrying the property. And some folks do turn a nice profit from rentals.
But the devil himself is in the details. Here are some thoughts before embarking on being a landlord:
Wear a flak jacket. Dealing with leases, tenants and repairs is not for wimps. Build up the muscle for hard-nosed negotiations and legal battles before you start. Brace yourself to see the worst side of human nature: raw greed, deception, blinding rage. Everything may go smoothly. Or not. Be prepared.
Know the rules. Tenants' rights are strong. Retain a savvy local lawyer to help you draw up leases and contracts. Tap into landlord-friendly resourcesto help you sort out complex issues. A strong defense is your best offense.
Run the numbers. Many people get fixated on the idea of profit-forgetting that no one is paying for a new garage door but you. Also, loan terms and insurance rates are typically higher for rentals. Yes, you can deduct many rental costs and you may be able to write off some losses. But the out-of-pocket costs can eat into your earnings. Do the math, factor in the drain on your time-then decide if being a landlord is the path to wealth for you.