Although the timing is on target for income property investing, not everybody is suited to be a landlord. Here are a few reasons why you may want to pass up this profession.
Real estate is not liquid. Even in a hot seller’s market may take several months to complete a sale.
Your mortgage may be fixed, but there is no guarantee that taxes will not rise faster than you can increase rents, or that insurance premiums won’t increase too.
You did everything right to find the perfect renter. Yet, the tenant doesn’t pay rent on time, is destructive and demanding. Sadly, the 3.64% per year depreciation allowance in the tax code seems truly inadequate.
As time moves forward neighborhoods can change even with good research. You might find some undesirable development impacting on your neighborhood. You should pay attention to local politics where you invest, just as you would where you live.
The tax code may change by reducing or eliminating some or all of the tax benefits for home ownership.
Being a landlord means increasing rent. Serving notices and confronting tenants over items that may be uncomfortable.
Minor repairs are most cost effective if you can do them yourself, but you may not have the time, tools or skills. Whether or not you are handy, find a local handy person to respond on an emergency basis.
Rental property ownership may be fascinating, but the return you can achieve must be much higher than you could earn in traditional investments. Often people will become landlords because it’s a family tradition or inheritance. Often times it’s because there’s a lack of knowledge. Seek out the professionals to help you. Contact your Realtor and set up a consultation to learn more about investing and your tax Preparer for the benefits of rental ownership.