In the San Diego rental market, demand is high and so are rents. There are lots of outstanding opportunities, especially if you already own a property that you’d like to rent out or you’re considering an investment in one.
There are some great things about renting out a home and some risks. If you’re thinking about becoming a landlord, make sure you understand the pros and cons.
Pros: Benefits of Being a San Diego Landlord
There are several financial benefits to owning San Diego rental property and being a landlord. You can plan on short term income and long term returns.
- Rental Income
You’ll earn income as a landlord. Not only do you have a consistent, predictable sum of money coming in every month as a rental payment, you’re also in possession of an asset that will increase in value. While you’re making more money on your property through appreciation, your tenants are helping you pay down the mortgage as well as additional costs like insurance, taxes, HOA fees, and other expenses.
- Tax benefits
Another good reason to be a landlord is that you can access a number of tax benefits with your rental property. You’ll have to declare all the rent you earn as income, but you’re eligible for tax deductions. You can write off things like maintenance, mortgage interest, depreciation, and professional services like property management.
- Establishing financial security
Investing in real estate allows you to build a solid financial foundation. You’re the landlord of one property now, perhaps, but you can leverage that property to continually acquire additional investments. That’s where the real money is made.
Cons: Challenges of Being a San Diego Landlord
While you have a lot of opportunity as a landlord, you might find you run into your share of headaches and stress as well.
- Rental homes require time and resources
It takes more time to lease, manage, and maintain a rental home than you might imagine. You’ll need to advertise your home, show it, screen tenants, and negotiate lease agreements. Then you must collect rent, respond to maintenance issues, manage tenant complaints, keep accounting records, and work on renewing the lease at the end of the year. If you have a full-time job or family responsibilities, you may find your time really limited.
- Landlord liabilities
You’ll need the right insurance and you’ll need to know the laws. You could face tenant disputes, lawsuits, and even fair housing claims if you’re not careful. You’re also responsible for providing a safe, habitable home for your tenants to live in. Landing in court because you couldn’t tell the difference between a service animal and a pet is an expensive problem.
- Ongoing maintenance is required
Budget for emergency repairs, routine maintenance, and preventative service calls and inspections. You’ll need to keep your property looking good if you want it to be attractive to tenants. This requires you to find vendors you can trust, and you’ll also need to know which upgrades and updates are essential during turnover periods.
Middle Ground with San Diego Property Management
You can enjoy all the benefits of being a landlord with few risks when you hire a San Diego property manager to take care of your rental property. When you partner with the right property managers, you won’t have to worry about wasting time or money. You will likely earn more on your investment, have a better rental experience, and be glad you decided to become a landlord after all.
If you’d like some help, we’re here to answer all your San Diego property management questions. Please contact us at Mercer Properties.