The Rewards of Being a Landlord

If you operate your landlord business correctly, the long-term rewards of being a landlord can be substantial. Overall, the business offers the potential to deliver benefits that are both financial and personal. In this sense, diversification certainly takes on a whole new meaning.

Self-rewards of Being a Landlord

The landlord business can present certain challenges that, when overcome with effort and proper planning, will create a strong sense of personal satisfaction and growth for you. Here are some examples of those self-rewards…

• Feeling of accomplishment - When all is said and done, there is no greater satisfaction than stepping back and actually seeing, with your own eyes, what you have accomplished through your own efforts. You'll be the one who receives the credit for swinging the bat and hitting the home run, not anyone else.
• Personal growth - Just like a typical small business owner, as a do-it-yourself residential landlord, you'll be exposed to a broad range of situations that require you to "wear many hats". Acquiring new, diverse skills that allow you to accomplish the work requirements will contribute to both your personal and professional growth over time.
• Personal satisfaction / Community benefits - The personal satisfaction of being your own boss, in charge of your own destiny, is a great feeling indeed. With proper planning, time and diligence, a point will come where you'll not be dependent on your regular job as a means of primary support. For many, this is one of the greatest rewards of being a landlord.

  Also, the satisfaction in knowing that your work provides a vital service by providing much needed housing for families is a great fringe benefit. As a result, the overall community will benefit from your service as well.

Financial Benefits of Being a Landlord

There are numerous financial rewards that result from a properly operated landlord business. In fact, the investment property business offers financial benefits that are not common with many other types of businesses. Here are some of the financial rewards of being a landlord…

• Income tax shelter - The "paper losses" that rental properties can produce that result from generous depreciation write-offs are allowed to reduce an investor's other taxable income. A primary example is using the paper loss to reduce your regular W-2 wage income tax.
• Equity buildup - Mortgage principal reduction, although slow in the initial years, can accelerate with additional mortgage payments. One or two extra payments each year will speed up principal reduction.
• Positive cash flow - A well-run rental property that has the right "cap ratio" will produce a positive cash flow for its owner each year. This cash flow has the ability to grow each year as a normal result of inflation and rising rents.
• Market value appreciation - The value of rental property can increase as a result of making improvements to the property (sweat equity) and/or from inflation and economic supply and demand forces. This appreciation can magnify your return on investment when leverage (mortgage financing) is used to purchase the property.

For more in-depth information about the rewards of being a landlord, please visit The Landlord's Library book collection. It's the ultimate, one-stop source for practical, comprehensive information on the entire subject of residential landlording.

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