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3 Things You Should Consider Before Becoming A Landlord

Becoming a landlord can be a smart financial move for some people. While the responsibility and stress can be high, the potential benefits are even higher in many cases. Being a landlord has many positive aspects, including controlling your property and having a reliable tenant paying you monthly rent with no strings attached.

However, several downsides need to be considered before taking this step. You should consider three things before renting your home or apartment as a landlord.

Can you afford your repayments if the property isn’t generating an income?

If you are buying an investment property, you will be taking out a mortgage on the property. Your repayment schedule will be based on the amount borrowed, interest rates, and payment periods. If you cannot cover your repayments, your lender will take the property and sell it to recoup the outstanding balance. Because this will likely take some time, you would also have to continue covering the repayments.

If you cannot make these payments, your credit score will be affected, and your lender may be able to place a lien on your other assets. Your lender will determine whether you can afford the payments based on your income and credit score. Many lenders also factor in extra expenses like property taxes and insurance when deciding if you can afford a mortgage. This is why ensuring you have sufficient funds to cover these payments is essential.

Do you have time to manage properties, or will you use a property management company?

Before you jump into the real estate investing world, you must ensure you have the time to manage the properties correctly. This includes finding tenants, screening applicants, setting leases, and making repairs. You may want to consider using a property management service when starting out.

This can relieve some administrative burdens and allow you to focus on finding quality tenants. The added cost of hiring a property management company can vary, but it is money well spent if it will enable you to focus on other aspects of being a landlord.

Are you aware of your responsibilities as a landlord?

Becoming a landlord comes with several responsibilities — both legal and moral. Some legal obligations you need to be aware of include:

  • Screening tenants thoroughly
  • Providing a written lease
  • Collecting and remitting taxes on rental income
  • Handling maintenance issues
  • Dealing with tenant disputes. 

There are also moral obligations you should consider before becoming a landlord. For example, while you can set rental rates and tenants are expected to pay the agreed-upon amount, you should not take advantage of tenants in any way. For example, it is considered unethical for a landlord to charge higher rent for a slanted reason — such as charging more for a single mother with a child.


Landlording isn’t for everyone. You need a certain amount of capital to start, and you must be willing to invest the time and effort required to manage the properties and deal with tenants. There will be challenges, but it can be a lucrative career for the right person. Make sure you have thought about these things before you decide to become a landlord!

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