If you’ve considered becoming a landlord, you might wonder if it is worth it. There are many pros to renting out property. You’ll be your own boss and earn an income without working 40 hours every week.
But if you’re seriously considering it, you’ve probably wondered what landlords can do when tenants are struggling to find ways to pay the rent or how much money landlords actually make.
Here are the upsides and downsides of becoming a landlord that you need to know before you make a decision.
11 legit ways to make extra money
1. It provides passive income
Becoming a landlord can provide passive income for some people. Whether it is truly passive depends on whether you plan to hire someone to manage the property for you.
If you do go that route, you can remain the boss and let your manager take care of the rental process and any issues that might arise.
But remember you will have to pay a property manager about 8% to 12% of the rental fee you collect each month.
If you decide to take it all on yourself, you’ll need to show up for tenants when they call and handle finding the tenants in the first place. But you can collect money every month without going to work every day.
2. Expenses are tax deductible
As a landlord, the IRS still requires you to report your income. However, you can deduct many of the expenses related to renting the unit.
According to the IRS, landlords can deduct costs for necessary repairs and maintenance, mortgage payments, and even taxes from their rental income. Even costs related to advertising the unit are tax deductible.
Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.
3. Rental properties are long-term investments
A rental property is a long-term investment that will help you prepare for your or your children’s future. Owning the property will provide you with options for how you make a return on the investment.
You can continue to rent out the property and bring in income even after retirement. Some landlords choose to sell the home or leave it to their children or grandchildren.
4. You’ll have flexibility
While you’ll still have some responsibilities, you won’t lose any income if you take time off. If you are sick or want to take a vacation, you will not need to worry about an angry boss or a small paycheck.
Some landlords even live in other states and let property managers handle …….