Category: Property Management Company
Many people look to real estate investing as a way to fund their retirement with passive income or pay for big life events such as money for college tuition for children, weddings, or to no longer be an employee and invest in rental property full time.
Before you make the leap, make sure you know the potential pitfalls with becoming a landlord.
1) Are you prepared to work a lot on your property rental? Because unless you hire someone you will be spending weekends painting and cleaning rental homes in between tenants.
2) Are you ok with dealing with late payments, maintenance, secret pets (if you have a no-pet policy), and feuding neighbors?
3) You will need a good bit of cash for a down payment on a rental property. And you will need to set aside a certain amount of money per month for maintenance and repairs, usually about 1% if you own the home and live in it but for rental property it probably should be closer to 2-3%.
4) You are taking on several risks which include: non–payment of rent, potential eviction, property damage, big repairs such as replacing the heating and air unit, roof, water heater and others.
5) Rental property horror stories. You will have occasional bad tenants who do bad things such as hanging a car engine from the living room ceiling so the tenant could work on it (yes this really happened).
The bottom line is if you have the money and can stomach the risk this could be potentially a good way to make additional income to fund the things you really want to do.