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Do You Really Want to Be an Absentee Landlord?

July 05, 2012 | Comments: 0 | Views: 257

As an absentee landlord, you do not live in the immediate area of your rental property. This could mean living as close as the other side of town or as far away as living half way across the world in another country. Being an absentee landlord has several advantages and disadvantages, which need should be explored fully by those thinking of becoming an absentee landlord.

Let's go over some possible advantages.

You may become financially independent. If you are renting out a property in a town or a country with a stronger economy than where you live, there is the potential to earn enough of an income from renting out the property to fully support yourself financially. Let's say you own a property in the United Kingdom, where rents can often exceed one thousand pounds per calendar month, then you could live on this income alone in a country with a lower cost of living such as Thailand.

Favorable exchange rates may allow you to live a very comfortable life in another country, knowing that you always have this guaranteed income. Essentially, you can live a higher standard of life than you may have been able to do if you had occupied a property in your home country. The rental property may generate enough income for you to pay all of your own bills and have enough left over to invest in another business or buy another property.

Of course the opposite scenario is also possible. If you are now live in the United States and are earning money from a rental property in the U.S., it may be beyond your means to buy a suitable home within your home country. However, you might be able to easily afford a property in another country where house prices are much lower. This could mean that you get a regular monthly income from your rental property, and you will always have an asset that you can sell at any time, without a large mortgage or a large amount of upfront capital.

Now let's go over some possible disadvantages.

If you are living in the same town as the property you are renting, you will be able to regularly inspect the property to make sure your tenant is abiding by your rules and generally being tidy. If you are an absentee landlord, this can be very difficult. You could get an extremely bad tenant who is damaging the property, and you would never have an inkling until it's too late.

Tradesmen who carry out repairs on the property may not carry out the work to their usual standards and at a reasonable cost, if they know the landlord is living in another country. If you live a few miles away, you can personally make sure they are doing their job to your specifications and that you're not getting ripped-off.

Also, the political climate of countries change all the time. What may be a stable country could quickly turn into a hostile one. Particularly as second home owners are often seen as a soft target. For example; In France, Franois Hollande's government has just upped the amount of tax foreign-based second home owners pay to punitive levels. France is deeply in debt, and rich foreigners are seen as an easy target by the socialist government. France is a first-world and highly developed country, yet it has happened there. There are countries which are far more volatile to absentee landlords.

So to sum it up, there is a potential to earn an extra income very easily as an absentee landlord, to supplement or even replace your main income. But you must always be aware of the risks involved and think it through carefully.

Learn more about being an absentee landlord and how you can quickly and easily earn life-changing income, while building your net worth with easy to manage, real estate rentals. You can checkout Stephen's latest website Riches With Rentals to learn how this is done. Get instant access to a 7 part e-courseEarn With Rentals to learn the no-excuses method to getting started today.

Source: EzineArticles
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