Running My Own Business: Owning Rental Property
What Did that Kid Flush Down the Toilet?
Owning rental property is both a rewarding opportunity and a frustrating venture. It provides a view of the best and the worst in people. Would I recommend owning rental property? Possibly ... or not ... but the following list gives pros and cons so readers can decide for themselves.
Pros
Steady income - In theory, owning rental property gives a steady income that covers the mortgage and/or property taxes, plus additional profit. So ... if the furnace doesn't blow up and bats don't roost in the attic, I make money!
Tax deductions - Benjamin Franklin said, "In this world nothing is certain, except death and taxes." The colonists didn't have income tax, but they did have the tea tax, so maybe ol' Ben knew from whence he spoke. Tax deductions are one perk from owning rental property - repairs, services, and equipment are a few of the allowable tax breaks.
Cons
Emergencies - It's probably Murphy's Law, but it seems emergencies always happen on holidays. The furnace quits at Christmas or the fence blows down over Labor Day. As a landlord, I may not like it but I realize owning rental property means the homemade ice cream will melt before I finish unplugging the renter's suddenly-stopped-up-toilet on my birthday. Repairs can also eat into profits - some years, I've barely broken even.
Horrible renters - Although I'm a pretty good judge of character, I'm not flawless. Plus, there are times when the rental home might sit empty for six months - no money coming in but payments going out, pipes freezing because it's winter, and more. In that case, I can't afford being picky so I risk ending up with irresponsible renters.
Regrets
If only - Looking back, I wish I'd taken a few business courses, as well as purchasing software to make it easier to track expenses. Hiring an accountant to do taxes and to answer questions would have prevented many hours of frustration. Finally, having a property manager would have kept my holidays free.
In conclusion, owning rental property is a mixed bag. Sometimes it brings a steady income from wonderful people, and other times, a huge migraine from less-than-desirable renters. Owning rental property is not something I would've considered for my list of top ten careers. However, if I had several rental homes over which to spread out losses and profits, perhaps I'd see it differently.
Sources
Personal experience.
More from this contributor
The Top 5 Questions to Ask Before Renting a Property
5 Questions NOT to Ask when Checking Out a Rental Property
Ways to Stay Out of the Unemployment Line
Pros
Steady income - In theory, owning rental property gives a steady income that covers the mortgage and/or property taxes, plus additional profit. So ... if the furnace doesn't blow up and bats don't roost in the attic, I make money!
Tax deductions - Benjamin Franklin said, "In this world nothing is certain, except death and taxes." The colonists didn't have income tax, but they did have the tea tax, so maybe ol' Ben knew from whence he spoke. Tax deductions are one perk from owning rental property - repairs, services, and equipment are a few of the allowable tax breaks.
Cons
Emergencies - It's probably Murphy's Law, but it seems emergencies always happen on holidays. The furnace quits at Christmas or the fence blows down over Labor Day. As a landlord, I may not like it but I realize owning rental property means the homemade ice cream will melt before I finish unplugging the renter's suddenly-stopped-up-toilet on my birthday. Repairs can also eat into profits - some years, I've barely broken even.
Horrible renters - Although I'm a pretty good judge of character, I'm not flawless. Plus, there are times when the rental home might sit empty for six months - no money coming in but payments going out, pipes freezing because it's winter, and more. In that case, I can't afford being picky so I risk ending up with irresponsible renters.
Regrets
If only - Looking back, I wish I'd taken a few business courses, as well as purchasing software to make it easier to track expenses. Hiring an accountant to do taxes and to answer questions would have prevented many hours of frustration. Finally, having a property manager would have kept my holidays free.
In conclusion, owning rental property is a mixed bag. Sometimes it brings a steady income from wonderful people, and other times, a huge migraine from less-than-desirable renters. Owning rental property is not something I would've considered for my list of top ten careers. However, if I had several rental homes over which to spread out losses and profits, perhaps I'd see it differently.
Sources
Personal experience.
More from this contributor
The Top 5 Questions to Ask Before Renting a Property
5 Questions NOT to Ask when Checking Out a Rental Property
Ways to Stay Out of the Unemployment Line
Published by Cindy Lynn - Featured Contributor in Lifestyle
A freelance author with numerous published stories/online articles, Cindy loves food, and enjoys collecting and trying new recipes. She also enjoys gardening--both vegetables and flowers (she completed cours... View profile
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7 Comments
Post a CommentGood article, but I have a brother who once had rental property. He ended up selling the property. Some tenants were real problems.
This is very interesting!!
It isn't something that you should enter without much consideration.Wise advice.
Lovely insights mixed with your great humor, as always. I think for me the cons outweigh the pros. :)
my brother has rented a large townhouse he has owned for years and years to the same family...he thought they might want to buy it one day, but still no...but he has done well with them and profited
Very true cindy lynn!
Good article. We have rental property and went through hell with some tenants. Now we rent the property to our daughter. No more headaches, although I know family can cause many problems, too! :)