While the many tax advantages and second (or fifth) income streams are beneficial, owning rentals can be a hassle. More specifically, the people (tenants) living inside your rental(s) can and will be a hassle to you at one time or the other.
5. No freedom to disappear. If you’re self-employed, you may love the ability to just get up and go on vacation whenever you decide. With rentals though, you are a landlord. If a water pipe bursts in the house, your tenants call you. If you’re in Maui, how do you fix the problem thousands of miles away?
4. Late payments. You buy house. Tenants move into house. You get your mortgage paid by rent payments. If it only worked this well — what happens if your tenant can’t pay rent one month? How will you react?
3. Drama. Loud music, too many cars on the street, etc. If you pick the wrong tenants, you’re screwed.
2. Finding a tenant. If you’re in a market that isn’t so hot, how are you guaranteed to find a tenant that can afford to cover your mortgage payment? Is the rent you can charge worth your ROI?
1. Deadbeats. Everyone who has owned a rental for a prolonged period of time knows all about this. The absolute trash tenant, paying late EVERY month, having the cops called on them for domestic disturbances, etc. They seemed so nice when they first moved in, didn’t they?
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