Ready to be a Landlord? Pros’ and Con’s of Owning Rental Property

I’m a Greater Cincinnati area Realtor and property investor, my local favorite markets are around Cincinnati, Monroe and the homes for sale in Montgomery, Ohio. I don’t generally flip houses, my business partner and I tend to buy-hold-and-rent.

We buy multi-family, usually a duplex and single-family homes. At first we managed our own properties but now we employ a professional property management company. My article below covers some pros and cons of being a landlord, but you should consider hiring a reputable property management company.

If you’ve ever thought about owning a rental property and becoming a landlord you likely have a few questions. What’s in store for you? How easy is it to be a landlord? What problems are you going to face? Is it really a profitable business model?

Examine some of the pros and cons of owning rental income property.

Advantages of Being a Landlord

You own property – an asset that can be sold, borrowed on and essentially increases your net worth.

First, you need to consider the market, like homes for sale in Montgomery, Ohio. This is one of my favored markets. Remember, location is key but so is buying wisely, financially speaking.

Income – Rental properties generally offer an income. Depending on the property and its location, the income will vary. And it’s essentially passive income. You may be required to maintain the home, however, the monthly rental payments generally cover that labor and more.

Income is not the only consideration obviously, there’s the expenses too and smart real estate investors factor in tax deductions. Keep in mind, there will come a day when you want to sell the property too. There are definite tax advantages to owning rental properties. In fact, your rental income may be tax free if you do not receive net cash flow after expenses are deducted.

Homes tend to increase in value. This means that as you own the property it will appreciate or become more valuable. It’s not guaranteed, however. As the property increases, you can increase rent depending on your goals and your tenants.

Make sure you research local markets and neighborhoods like homes for sale in Montgomery, Ohio, avoid those neighborhoods in decline. Check with city zoning too.

Homes and properties for sale in Montgomery, Ohio

Remember, you can refinance your mortgage if interest rates fall and your property appreciates. This is tax free. Or if you sell the property and reinvest in another property, the profits can be tax free. It’s called a tax-free exchange.

You also have the satisfaction of working for yourself if you own several properties. This can be your full-time job and it generally doesn’t require full time hours. This can be a huge advantage to being a landlord.

Disadvantages of Being a Landlord

Properties don’t always increase and you may end up breaking even.

There is also the problem of finding tenants or having to deal with problematic tenants.

Liability problems. Being a landlord means being responsible for what happens in the home. If someone gets hurt, they may decide to sue you. Insurance can be costly and liability can be stressful. It’s your responsibility to make sure your rental home is up to code and safe for living.

Unexpected expenses and repairs. Homes need repairs, it’s a fact of life and home ownership. And generally those repairs cost more than we expect and happen at the worst times. Being prepared for unexpected expenses and repairs with a savings account can mitigate this disadvantage.

Owning a rental property is full of ups and downs. Deciding if it is the right choice for you requires weighing the pros and cons. Consider talking with other landlords and rental property owners before making a decision. Consider the option of obtaining a professional property management company too. To your success!