{"id":149162,"date":"2012-10-18T04:00:05","date_gmt":"2012-10-18T11:00:05","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=149162"},"modified":"2023-10-11T22:11:27","modified_gmt":"2023-10-12T04:11:27","slug":"being-a-landlord-is-it-worth-it","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/being-a-landlord-is-it-worth-it\/","title":{"rendered":"Being a landlord: Is renting out a house worth it?"},"content":{"rendered":"
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In 2006, my husband and I bought our first rental property. We put 10 percent down ($8,500) on a small brick ranch in the same Midwestern community that we call home. I had gotten my real estate license several years prior, so I had some basic knowledge to build from. We still weren’t 100 percent sure about what it meant to be a landlord, but we thought that it would be a great opportunity to build long-term wealth. We also hoped that the home would provide a passive income stream for us once it was paid off. A few months later, we converted our starter home into our second rental, and we bought and moved into our third home, where we currently reside.<\/p>\n
So, there we were – 27 years old, with two rental properties and high hopes that everything would turn out as planned. Another landlord we know gave us a copy of his lease to use, and we got lots of advice from other friends who own rental property. We placed ads in the local newspaper and signs in the yards of both homes. Luckily, they both rented out quickly for the amount that we asked without much effort. We were young, dumb, and in love…and we thought that we were real estate moguls!<\/p>\n
However, the truth was quite different than what we had pictured. Soon, we found out that owning rental property requires a lot of hard work, patience, and planning. Being a landlord wasn’t turning out to be the glamorous hobby that we envisioned at all. Still, we were excited about the future and moved forward in our new role as landlords.<\/p>\n
Owning rental property is a great concept for building wealth.<\/strong><\/p>\n On our end, it required a cash down payment and will require years of cash support via repairs, upkeep, and major component replacements. At the same time, someone else is paying off a property for us. Once the homes are paid off, we will have two additional income streams to add to our earnings from our 9-to-5 jobs. <\/strong>Even after paying for repairs, the cash flow will be significant and will (hopefully) help us reach an early retirement<\/a>. We often enjoy months at a time without thinking of the properties at all. Additionally, our properties generate a small amount of side income, though at this point we use the additional funds to accelerate their payoff.<\/p>\n <\/p>\n Holly’s first home, which became her first rental.<\/em><\/p>\n There are times when it is smooth sailing, but that is not always the case. Owning rental property can be a ton of work. It takes patience and the ability to deal with many different personality types. Each time one of our properties becomes vacant, we have to place ads to find a new tenant. Sometimes searching for a new tenant can bring a lot of shenanigans. For instance, we have had people lie on their application about their employment or credit rating. Others have been completely dishonest about having a job at all. After checking one person’s application, we found that they had multiple evictions on their record. Obviously, we didn’t rent to that person!<\/p>\n Even after you find a qualified tenant, sometimes problems will still occur. Some of our tenants have been habitually late paying their rent. We have a late-fee stipulation in our lease, but we have never charged anyone. We simply don’t need the added drama, although we are probably just perpetuating the problem. Still, as long as they pay within a few days I don’t get too worried about it. We just choose to pick our battles.<\/p>\n The good news is that the majority of people we have rented to have been absolutely pleasant<\/a>. At the same time, just like with anything else in life, there are a few bad apples mixed in to give renters a bad name. Speaking of bad apples…<\/p>\n Occasionally, being a landlord means living out your own landlord horror story. In 2010, one of our tenant families was nearing the end of their lease. We hadn’t been called recently and – therefore – hadn’t been at the house for many months. However, I happened to drive by one day and noticed that something about the house looked really strange. I drove by again and still couldn’t put my finger on it, but we would soon find out.<\/p>\n A few weeks later, the tenant called and wanted to arrange a meeting. We arrived at the house and walked toward the front door. As we approached, I realized why it looked so weird: The picture window on the front of the house had been replaced with a different window! I knew that this wasn’t a good sign. Apparently, they had broken it somehow. Instead of calling us, they found a salvaged window of the same size and installed it themselves. The old and wooden frame didn’t match the newer vinyl replacement windows, so it stuck out like a sore thumb. Unfortunately, that was the least of our problems.<\/p>\n Upon entering the house, we realized that the drywall in almost every room had giant holes punched in it. The carpet, which had been new when they moved in, was stained beyond recognition. All of the interior doors in the house were missing. The refrigerator was missing. Someone had busted in the front door, and the entire door frame had been hastily and obviously glued back together. The house was an absolute disaster area, and the tenant had asked us for a meeting in order to resolve the issue.<\/p>\n<\/span>The Bad<\/span><\/h2>\n
<\/span>The Ugly<\/span><\/h2>\n