Renting out property seems simple enough:
-
Buy a house or apartment building.
-
Rent out the rooms to tenants for a nominal fee, aiming to earn consistent rental income.
-
The rental checks come in each month while you sip pina coladas and make passive income.
That DOES sound awesome, but it’s also an oversimplification. In fact, renting out property is anything but relaxing. That’s because you’re responsible for all facets of the building you’re renting to tenants. That includes repairs, maintenance, and chasing down tenants who don’t pay you rent.
And if they do miss a rent payment, you’ll have to find another way to pay your monthly mortgage payment.
You CAN make money from renting out properties (many people do!), primarily through rental income. It’s just that doing so could negatively affect your finances in a BIG way. Check out my house poor article for a good example of that.
Luckily, with the rise of services like Airbnb, you could rent out a spare room in your house and not worry about buying a separate apartment unit.
You simply sign up for the platform and take advantage of short-term rentals. You’ll still have to deal with certain pains of property management, but you’ll be able to leverage property you already own (e.g., a spare bedroom in your house).
For many people, owning multiple properties can put a strain on your finances- and your relationship. In episode 88 of my podcast, I talked to a couple facing big problems thanks to their real estate portfolio.