Benefits to Becoming a Part Time Landlord
The accidental landlord is a common term in the property world. It is often the case when a previous home cannot be sold it is kept and rented out to earn additional income every month. This opportunity can lead into the scenario of being a part time landlord.
So why wait for this opportunity to fall in your lap when there are so many convincing reasons to become a part time landlord today. Here’s just a few:
The Additional Income From being a Part Time Landlord
The obvious plus of becoming a landlord is the extra income coming in every month. Your rental property can rent for any amount of money, but you need to check the market to locate a reasonable price. That being said, a rental property should aim for making anywhere from $200.00 or more in income above and beyond the mortgage and taxes. Being a part time landlord should place you in a positive equity state, not a losing venture.
Renting a property is an investment. Whether you’ve bought a property specifically to rent or have chosen renting instead of selling your property, this is still a big investment in your life. The benefit of this is the long term security it can offer, paying into what could be a pension or a rainy day fund, and not forgetting there is also the return you can get from selling the property at a later date. Your goal is to make your net worth higher every month. So making additional payments in your property is a good thing, especially when you have it paid off.
Through managing your own business and property the decisions are left to you. You’re the boss in this situation with the ability to choose everything from the right tenants to which assets to include. The freedom can be liberating.
Now it wouldn’t be right if we didn’t make you aware of the downsides too:
All income you receive from being a landlord is taxable and you will have to deal with the relevant paperwork. However there are some areas that are tax deductible including money spent on maintenance around the property from repainting, replacing damaged furniture and cleaning around the home. Any expenses used for professional services can also be tax deductible including cleaning, decorating and maintenance.
From small, seemingly insignificant issues to big emergencies, as a landlord you will be the first point of call for tenants. So be prepared for frantic phone calls in the middle of the night and spending some of your time dealing with DIY jobs or organizing the relevant professional to get the job done right. This can be time consuming and frustrating, and so weighing up the cost of an agency to deal with these issues could be beneficial.
Without an up to date knowledge on property laws and regulations, you could be getting yourself into a dangerous situation without even realizing it. Plus issues relating to late payments, rent disputes and evictions can get messy. With this in mind, using an insurance agency such as UKinsuranceNET that specialize in specific landlord insurance, can give you both advice and peace of mind when it comes to your property investment and monthly income.
So there you have it, some of the ups and downs of being a landlord. It can be an extremely rewarding job but make sure you’re prepared for the potential negative side and don’t leave yourself vulnerable.