Want To Be A Landlord? Think Again!
The markets in the cities of Vancouver and Toronto are so ‘attractive’ that some are contemplating whether or not to get in on the action. Buying a property and leasing it out will make you a lot of money, depending on the type of property of course.
Before you do, read further and find out the pros and cons of becoming a landlord.
Here are a few of the challenges you’ll face as a landlord.
#1. Finding a great property
First of all, figure out the type of buyer you are. Are you the type that is in a hurry to rent the property as soon as you buy or are you more interested in buying a property that needs some TLC?
The latter is probably for those who are into fixing things with their hands such as engineers, architects, designers, plumbers, painters, artists, etc. If so, then go ahead with your plans and have fun creating!
But do evaluate the free time you have now and if that will be enough for the house. If not, are you willing to spend your entire free time in the house?
#2. Dressing it up
Since you are planning on becoming a landlord, you have to take into consideration that every time a tenant moves out, you will have to refurbish the apartment or house in one way or the other. This in itself is time-consuming and as the old adage goes, ‘time is money’.
Also, make sure to rent out our property to someone who will take good care of it because some landlords have experiences wherein the tenants literally destroyed their properties with either too many animals or just simply being careless with something that did not belong them in the place.
#3. Finding the tenant
The speed at which you’ll find a suitable tenant is directly proportional to the rent and maybe the location. If the location is suitable but the rent you are asking for is ridiculously high, you’ll find it difficult to get a tenant.
Putting out ads in the newspapers or on various online media such as Facebook, Craiglist, etc, are inexpensive ways of getting the word out there.
If you are like me, and you don’t like it when your sleep is interrupted by late night calls then rethink becoming a landlord, especially if the unit is next door to where you live because there are some tenants who won’t have any qualms with driving over to your place in the middle of the night just to complain about the plumbing or some other issue.
Even if you are lucky to get a great tenant, he or she will also come with their own set of problems. No matter how few!
The other type of tenant is an absolute nightmare! Expect your phone to be blowing up every single hour, flooded inbox and even random visits at either your home or workplace.
#5. Maintenance of the unit
If you are planning on renting out a fully furnished apartment, then you are going to spend a lot of money on buying the furniture and also on maintenance.
Items like the stove and fridge cannot be omitted but you might want to think about how much you are willing to spend on the unit. This will also have a great effect on the rent you’ll be asking for.
If you put in more money than you are asking for, then be ready to flush money down the toilet.
Some housing humor for you!
#6. Interest Rates
You might think that interest rates have no bearing on your property but unfortunately, it does!
The lower the rates the easier it is to buy but the same does not apply to rent so you could lose money when rates fall.
- Sharing the property
Living on one side of the property and renting out the other half is a good idea for a few reasons but you have to keep in mind that you will be very easy to get to, in more ways than one, so do think about the repercussions.
- To be or not to be?
That is the question. The pro is that you will save a lot of money but the big con is that an ex-con might become your tenant.
- The pun was intentional.
- Some people want to spend as little money as they can on the unit. This has its pros and cons.
- Long-Term Holdings
Your profits at the end of the third decade will small if you want the tenants to pay off the mortgage then sell the property off. It may be profitable but not really.
Still want to be a landlord?
If you still want to become a landlord after reading this article, then go for it. But as aforementioned, do take the pros and cons into serious consideration before making any decision. Also, make the decision that is best for you.