Being a landlord: pros, cons

Many people think it could be appealing to be a landlord, owning property and renting it out to tenants. It certainly might seem like relatively easy money: You collect big checks every month, you can get some large tax deductions — and real estate values aren’t that likely to suddenly fall, the way some stocks might.

There are a lot of downsides to “landlording,” though. For starters, there’s a lot more to it than just collecting rent checks. You have to find tenants first, and it can be hard to find good ones sometimes. Bad ones can cause massive, long-lasting headaches if they are repeatedly behind with the rent or, worse, damage your property. If you’re not comfortable dealing with a wide range of people, you may have trouble dealing with some tenants — though you might hire a management company to do that for you for a fee (which is often around 10% of rent).

If an eviction is necessary, that can be a lengthy and difficult process. And there will likely be periods between tenants when you are still making mortgage payments on the property but not collecting any income from it.

Meanwhile, just as with any property you own, you’ll not only be making those mortgage payments (unless you were able to buy it outright), but you’ll also face insurance costs, property taxes, and maintenance and repair expenses. Those expenses include keeping the lawn mowed, painting rooms and replacing carpeting between tenants if needed, and fixing things that need repairs. Also, renters may not take as good care of others’ property as they would their own.

Read up on local laws relating to investment properties before buying any rental property. You might also read a book such as “Real Estate Investing for Dummies” by Eric Tyson and Robert S. Griswold (For Dummies, $42). And weigh the pros and cons of investing in real estate against those of, say, stocks. For example, you can sell some or all of your stocks anytime, but selling real estate can take a while.