First published: 1 November 2021 @ 6:00 pm
A landlord can provide an excellent living space for his tenants. However, they have to be knowledgeable of their rights and responsibilities as a landlord.
They also have to maintain their property in a good condition and make sure that it is available for prospective tenants. The article gives you some useful tips on how you can be a good landlord and the risks involved in being one.
Risks of Being a Landlord
A landlord or a property manager is required to provide the building in a good condition for his tenants and must ensure that it is safe and suitable for living in.
However, this does not mean that he will never encounter any problems during his tenancy period. There are many things that can happen when you are a landlord, such as;
The building might not be in good condition:
You may discover after you move into your new home that it has defects or deficiencies such as leaks, pests, mildew or holes which will affect your daily life and activities inside the building.
Your tenant may also refuse to pay rent if he/she feels uncomfortable with the living conditions inside the house, or they might not like your style of managing your homes or there might be some dispute with your tenant.
If you don’t know how to handle repairs:
If your building is not in a good condition, you may have to handle repairs yourself. However, this may be difficult for you because you might not have enough knowledge or skills in doing so.
You may also have trouble hiring a contractor for the job and the project might be delayed. In such a case, your tenants might have to suffer from inconveniences. This can result in the loss of money for both parties involved.
You might be sued by your tenant:
Your tenant can sue you if he/she feels that his/her rights are being violated by you. If your tenant is unhappy with the living conditions inside the house or his/her rights are being violated by you, then he/she can sue you in court and get compensation for any losses that he/she has suffered because of your negligence as a landlord.
The court will decide whether it was due to negligence on your part or whether it was due to the tenant’s mistake.
Is Landlording the Right Investment for You?
Landlording is not the right investment for all. It is important to take into consideration the amount of money you are willing to invest in this investment.
You should also know whether you are willing to spend your time on managing your rental property or if you want someone else to do it for you. You can have a professional property manager do the management of your rental property.
The fact that you will have to spend a lot of time managing your rental property is a disadvantage. You will also have to spend a lot of money on repairs and maintenance.
However, there are benefits to owning a rental property. You will get to enjoy the extra income you get from your rental property.
You will also be able to enjoy the security of knowing that you will be paid for your rental property. It is a good way to make some extra money on the side without actually working a full-time job.
You should therefore weigh the pros and cons of being a landlord before you decide to be one.
What Are the Pros and Cons of Being a Landlord?
The pros of being a landlord are as follows:
A good investment:
You can make a good passive income from your property. You will also be able to pay off your debt and expenses. It is a wise decision to invest in property since you will have a stable source of income.
You can also enjoy the benefits of owning an asset that will increase in value over time.
The property will also help you to increase your net worth. You can sell it if you want to improve your financial status. The sale will be profitable since you will be able to use the money to pay off your debts.
Tax benefits:
The tax benefits of owning a property are many. It is a great way to increase your wealth. The interest you pay on the loan will be deducted from your taxable income.
This will reduce the amount of tax you have to pay. You can also enjoy some deductions. You can get tax deductions on mortgage interest, property taxes, and property insurance.
Protection from tenants:
Landlords are responsible for the safety of their tenants. They will also be able to prevent them from committing crimes.
This will protect the landlord from legal issues that may arise. The landlord will also be able to charge the tenants for damages caused by them.
The cons of being a landlord are as follows:
Maintaining the property:
Landlords have to keep their property in a good condition. They will have to make sure that the house is free from bugs and pests.
It is also important to maintain the property in a good condition so that it is free from leaks and cracks. It is also important to check the condition of the property on a regular basis.
The property will be occupied by a number of people. This will increase the chances of accidents. It is also important to take preventive measures so that the house does not get damaged. You will also have to deal with complaints from your tenants.
Difficult tenants:
Some tenants are difficult to deal with. They will also have issues with paying their rent on time. It is important to remember that you are not responsible for their behaviour. You will have to evict them if they fail to pay their rent.
Security:
It is important to have security in your homes. You will have to install alarms in the house so that it is protected from theft. You will also have to check the condition of the locks so that they are not broken.
So, being a landlord or a property manager comes with great responsibilities. You need to think about the risks, the advantage, and disadvantage that comes with it.