It seems so simple: you buy a home as an investment and you rent it out.
This way you will be able to repay the mortgage and you will have an extra income at the end of each month.
Easy peasy, right?
Is it really as simple as what it might sound?
Unfortunately, there are some ugly truths about renting out your home that people don’t think about ahead of time!
So, this might be a good time to let you know that renting out your home isn’t as simple as what it appears to be:
#1 – There are some unreliable tenants out there
One thing that you need to know is that there are some unreliable tenants out there. Tenants that are going to make it hard for you as a landlord.
Unfortunately, that’s the hard but honest truth!
People don’t always trust their instincts or they are desperate to get a tenant. At the end of the day, you might have taken someone on board who is rather unreliable. And who is struggling to keep up with the rent money – heck, and might even disobey rules that you as a landlord & tenant have set in place from the onset.
#2 – Damage to the home is a huge risk
Reality is that you ought to consider potential damage to your home when you have tenants!
Let’s be honest: as tenants, they don’t really care about what they are doing in a rented home. They don’t need to pay for the repairs any way. So, you might have tenants who will tend to do damage to your property that you will need to repair and pay for before you can get new tenants.
In the end, you as a landlord will lose a lot of money before you can get new tenants in again.
#3 – It might not be as easy to find any tenants
You might think that there are many people who are looking for a home to rent. But, actually finding one that is prepared to pay the price that you are asking and to accept the rules that you might have about pets might not be as simple.
A lot of people are looking for homes to rent, but they tend to look for rentals on their terms!
Meanwhile, the property is unoccupied, which means you’re not going to see any rental income that month!
#4 – Doing maintenance on a regular basis
Even if you have the most reliable tenants in the world, you are still going to do maintenance on a regular basis.
Tenants tend to phone the landlord for every little problem that they have in the home. It doesn’t matter whether it’s a tap leaking or damage to the roof.
Initially, many landlords don’t realize that maintenance can cost a lot of money. And, if your rent isn’t appropriately adjusted, you are going to struggle to see any net cash flow as a landlord.
Don’t let this be the deciding factor
However, please don’t let some of these four ugly truths keep you from investing in a home and renting it out!
We all know it won’t be the case for each and every tenant that you are getting, but you ought to be aware of it. If anything, it’ll make you double-check to make sure about the quality of tenants that you are getting for your home.
So, it’s no surprise to hear that this is one of the main reasons why many landlords are making use of rental agencies to assist with renting out their homes. Those managing agents will make sure that the potential tenants they’re going to place in your home will be properly screened.
Bottom line: renting out your home can be something that ends up in a nightmare.
However, there are quite a few upsides from renting out your property, yet, one needs to be aware and seriously consider taking the landlord step before actually deciding to start renting out your home.
Be prepared what to expect and that dreaded renting nightmare might never arrive!