The property business is very lucrative if you know what you are doing. Some people started out owning a small abandoned building and now they are property moguls. One thing I can say about this line of business is that one has to be disciplined, have patience, be willing to take calculated risks, and most importantly have a level head. Emotions should be taken out of the equation because when you are too emotionally invested in something, chances are that you might make business decisions you will regret in the future.
Telling people that you are a landlord and that you own a few properties sounds good. It gives people the impression that you have money and you have your life figured out. As much as it might seem all rosy, it takes a lot of work and there are many challenges that come with it.
The most obvious advantage of renting out property is money. If you run your business well you could live off the money that comes from the property. For those that have another job or “side hustle”, the money that comes from renting out the property can be used to either invest in the stock market or to buy more property.
A lot of people dream of retiring early but their jobs do not afford them the luxury to do so. When you become a landlord and own a few properties that are always rented out, retiring early is possible. Your efforts can be diverted to maintaining and growing what is there so that you can have the same or even more income than before.
It is highly unlikely that property prices drop. In most cases, they tend to go up due to increased demand caused by the ever-growing population. This makes property a great investment especially for retirement unlike other volatile investments such as shares and commodities.
I believe that landlords can give back to the community and do their little bit to change the world without compromising on profits. A good example is offering single parents affordable rent or understanding when they fail to make a certain payment on time. A struggling family member can also be helped out until they get back on their feet. I am of the opinion that good deeds never go unnoticed and that those small acts of generosity will pay off in the future.
There are so many disadvantages that are associated with this line of business. If you want to make money and keep earning a certain amount you have to be disciplined. Spending a whole month’s rent from one or all of the properties on luxury goods will slowly lead to bankruptcy. This is because there are certain municipal rates that have to be paid as well as maintenance of the buildings.
If your buildings are old, they have to be remodeled to look new and trendy so as to attract new tenants as well as to keep the old ones. This process costs a lot of money and so it should be factored in when saving rental money.
Being too nice can often lead to people taking advantage of you. You should be wary of friends and relatives when you offer them reduced rates or free accommodation for a limited period. More often than not, they tend to overstay or end up being a nuisance to you.
It is also important to know all the laws relating to renting out a property so as to avoid legal battles. Landlords are advised to consult good lawyers who are able to draw up lease agreements that give them maximum protection without overstepping on tenants’ rights.