Being a rental property owner is something many strive for in their lives. This is because much of the time, owning a rental home is a great investment. The responsibility that goes along with it is great as well, though. Owning multiple rental properties only ups the stakes. As with anything else, there are a lot of disadvantages as well as advantages. Let’s go through some.
The advantages of owning multiple rental properties
Having multiple rental properties has plenty of upsides. Looking at the positive side of things first will hopefully make you see that the flaws aren’t that bad.
It’s always good to have a passive income
If you own multiple rental properties and are able to keep them occupied, not only will you have a steady and secure amount in your bank account, but you’ll also have a passive income. This is certainly always welcome.
A possible business opportunity
A great thing about owning multiple rental properties is that you don’t have to sell only to tenants who are looking for housing. If your property is in a desirable location, you could always rent it out to business owners. This could be a great investment opportunity.
Living out your dreams
If you’re someone who’s always wanted to buy a fixer-upper, this is a great way to do it. Provided that you already own one or more rental properties and that you’re financially stable, this could be a chance to play around a bit and mix business and pleasure in the best way possible.
The disadvantages of owning multiple rental properties
Of course, if you’re seriously thinking about owning multiple rental properties, you have to look at both sides in order to have an objective overview and figure out what is best for you.
Always having something to tend to
Although small relocation is a part of your daily routine when you’re a property owner anyway, having rental properties is even more challenging than that. Having tenants in one rental property is hard work. Having more rental properties definitely asks for a ton of energy and focus. Like it or not, being a landlord takes a lot of hard work and dedication due to you being primarily responsible for any damage or issue that occurs in the home.
Lacking experience in some fields
As you may not be doing this as a your main profession, there’s a lot you may not be familiar with. This could cause some problems. If you’re, let’s say, buying a condo but have previously only owned houses, you’re in for a surprise. This is completely natural. Something you can do to decrease the number of inevitable mistakes is to have someone experienced to consult.
Although you’ll make sure that your contract is well thought out, there’s a chance that your tenants might not turn out to be as great as they seemed at first. This can happen to anybody and it is solvable, but it’s a dreadful experience nonetheless. Just make sure to have a real estate attorney by your side if anything arises.
Destruction of property
As the worst outcome of them all, there’s a chance that your property could get seriously damaged before you’ve gotten the chance to see what’s happening and stop it. The best thing to do here is not to stress too much about it. If your contract is done in the right way, your insurance will cover anything that might’ve gone wrong.
Create a bulletproof contract
Although you’ll need to be actively involved in this process no matter how well written your contract is, having a solid, bulletproof deal will be of great help. Owning multiple rental properties is something that will take up enough energy as is, having a person to overlook everything is the way to lessen the burden on your shoulders. Contacting a lawyer that you trust is the best way to do this.
Now that you’ve seen the pros and cons of owning multiple properties, you can make a clear decision as to why this is something you may have a passion for or if you would rather not the risk.