Becoming a landlord is one of the best ways to make money from your property. While you may there are problems that come with being a landlord, they are far outweighed by the benefits. Being a landlord is the perfect opportunity to invest your money in a property, and earn a steady income. You can stay small with just a property or two, or you can build an entire portfolio or company by renting a range of properties out. If you build it into a portfolio, you are likely to generate a positive cash flow and provide yourself with a source of income for years to come.
If you’re not sure whether becoming a landlord is for you, here are some of the top benefits to help you make up your mind.
#1 Good investment
If you are trying to save money to build your wealth or secure your retirement, leaving your money in your savings account isn’t going to do much good. The interest rates on savings accounts are extremely small, if any at all. On the other hand, properties provide you with a great investment opportunity.
Not only will your money be safe within an asset, but you also have the opportunity to build your wealth as the value of the property inevitably increases. Some of the richest people around the world have built their wealth from properties. The property market prices are only increasing, so you can make money on your property. The amount of money you can make will vary, depending on the value of the property, the growth of the market for the time you own the property, and the location.
Not only will you make money from the equity in the property, but if you rent out the property, you will also have a tenant who is paying you to live there. This will mean your mortgage is paid off monthly, and you earn a small profit each month.
#2 Low maintenance
If you choose to become a landlord, you can manage the rental properties yourself which includes finding the tenants, writing up the contracts, handing over the keys, fixing any problems they may have, and more. As long as the property is in good condition and you possess the right skills, it won’t take up much of your time.
Alternatively, you can use some of the profit you earn from the properties to hire a management company or an agency to do all the work for you. This means you can invest your money, earn a profit, and not have to worry about the upkeep. You can source a reputable, local company who will manage the property for you, and all the tasks that may be involved. This can be extremely helpful if property management is a side project for you if you are particularly busy with other projects, or if you want to grow a portfolio of properties to manage. It is also helpful if you don’t have the specific knowledge or skills it takes to manage the properties, such as legal, finance and handy work. While the profit you make will reduce slightly, you are still making a worthwhile investment.
#3 Passive income
Whether you want to boost your monthly income or save for a good retirement, becoming a landlord and renting out a property can benefit your bank account. With the right tenant or a rent guarantee scheme, you can provide yourself with a regular income. It will take time and money to get set up, as you find a property, renovate it and put it on the market, but once you have a tenant who has signed a lease and is settled in the property, you can start generating income. Rent is typically charged at the market rate, which works out more than the average mortgage payment, meaning you can make a good profit each month. Leases tend to be for 1-5 years long, which means you don’t have to worry until you are due to get another tenant in your home.
The great thing about renting a property is that you can use the profits you make to invest in another property so that you can slowly build a portfolio. The more properties you have, the more passive income you can earn. The opportunities are endless as you can have as many or as few properties as you like.
Becoming a landlord comes with many benefits if you are interested in earning a passive income, making a good investment and want a low maintenance project.