9 Benefits of Being a Landlord (and Why It's Worth Considering)
Thinking about renting out a property but not sure if it's the right move? At Hommy, we work with new landlords every day, and one thing is clear: real estate ownership is more than just collecting rent—it's about creating long-term security and building wealth.
If you're weighing the pros and cons, here are nine compelling reasons why becoming a landlord could be one of the smartest financial decisions you'll ever make.
1. Financial Security You Can Count On
Life is unpredictable—jobs change, markets shift, and emergencies happen. Owning rental property provides an additional income stream that can help stabilize your finances. Even if your day job disappears, rental income can keep you covered.
Multiple income streams create a safety net that protects you and your family during uncertain times. When you have rental income flowing in each month, you're not entirely dependent on a single paycheck or career path.
2. Steady Wealth Growth Through Appreciation
Real estate has a track record of long-term value growth. While markets can dip, property values in the U.S. have historically risen year after year. That means your property isn't just earning rent—it's likely becoming more valuable over time.
According to the Federal Housing Finance Agency, home prices have appreciated an average of 3-5% annually over the past several decades. This appreciation compounds over time, building substantial equity that you can leverage for future investments or financial goals.
3. Reliable Rental Income
With the right tenants and management strategy, rental properties can generate consistent monthly cash flow. Over time, this income becomes more passive, freeing you from relying on just one paycheck.
The beauty of rental income is its predictability. Once you've secured quality tenants, you can count on regular monthly payments that help cover your mortgage, property taxes, insurance, and even generate profit. As rents increase with inflation, your income grows while your fixed-rate mortgage payment stays the same.
4. A More Predictable Investment Than Stocks or Crypto
Unlike stocks that can swing wildly—or cryptocurrencies that can lose value overnight—real estate is a physical asset that tends to remain steady. It may not skyrocket in a week, but it also doesn't vanish in a flash.
Real estate provides tangible value: a physical property that people need for shelter. This fundamental demand creates stability that speculative investments simply can't match. Even during market downturns, your property retains intrinsic value and continues generating rental income.
5. The Power of Leverage
One of the unique advantages of real estate is the ability to use leverage. With a relatively small amount of money as a down payment, you can gain control of an entire property worth many times that amount.
Tenants help pay down the mortgage, while you build equity on a much larger base than you could ever achieve by putting the same cash directly into the stock market. For example, a $40,000 down payment on a $200,000 property gives you control of a $200,000 asset—and all the appreciation and income that comes with it.
6. Diversification Outside the Stock Market
Even if you've diversified within stocks and bonds, they're still tied to market swings. Real estate adds another layer of protection. And in the worst-case scenario, you can live in your property or keep renting it out, giving you a backup plan most other investments can't match.
This diversification protects your overall wealth from market volatility. When stocks decline, real estate often maintains its value or even appreciates, providing balance to your investment portfolio.
7. Professional and Personal Growth
Becoming a landlord is like running a small business. You'll sharpen skills in finance, negotiation, tenant relations, and even home repairs. These lessons build confidence and make you more capable in other areas of life.
You'll learn to:
- Analyze investment opportunities and calculate returns
- Screen and communicate effectively with tenants
- Coordinate maintenance and repairs
- Understand local laws and regulations
- Manage budgets and track expenses
These transferable skills enhance your professional capabilities and entrepreneurial mindset, opening doors to future opportunities.
8. The Pride of Ownership
Beyond the numbers, there's something special about owning a property and making it a successful rental. You're providing a home, building something tangible, and creating a legacy. Positive relationships with good tenants only make the experience more rewarding.
Many landlords take pride in maintaining quality properties that serve their communities. You're not just investing in real estate—you're creating comfortable, safe housing for families and individuals who need it.
9. Tax Advantages That Sweeten the Deal
Finally, let's not forget the tax perks. Landlords can deduct mortgage interest, property insurance, maintenance, repairs, and even some business expenses like phone bills or professional services.
Plus, properties depreciate over time (on paper), creating additional savings come tax season. The IRS allows you to depreciate residential rental property over 27.5 years, which can significantly reduce your taxable income even while your property appreciates in real value.
Other tax benefits include:
- Deductions for property management fees
- Travel expenses related to property management
- Home office deductions if you manage properties from home
- Property tax deductions
- Depreciation on appliances and improvements
Consult with a tax professional to maximize these benefits for your specific situation.
Frequently Asked Questions (FAQs)
Is being a landlord worth it?
Yes—if managed well, being a landlord offers financial security, rental income, and long-term wealth-building potential. It's also one of the few investments where you control a physical, income-producing asset. The key is proper planning, good tenant screening, and maintaining your property well.
What are the risks of being a landlord?
The main risks include vacancies, difficult tenants, unexpected repairs, and property market fluctuations. With proper tenant screening, maintenance planning, and financial reserves, most risks can be managed effectively. Working with a property management company can also help mitigate many of these challenges.
Do I need a property manager?
Not always. Some landlords handle everything themselves, especially with one or two properties. But if you prefer a hands-off approach or own multiple units, hiring a property manager can save time and reduce stress. Learn more about property management fees to determine if it makes financial sense for your situation.
Can I start with just one property?
Absolutely. Many landlords start with a single rental property. Over time, as they gain confidence and experience, they may expand their portfolio. Starting small allows you to learn the ropes without overwhelming yourself, and you can scale up as you become more comfortable with property management.
How much money do I need to start?
Typically, you'll need a down payment (usually 15-25% for an investment property), closing costs, and an emergency fund for repairs and vacancies. The exact amount depends on your market and the property you're purchasing. It's wise to have at least 3-6 months of expenses saved as a buffer.
Final Thoughts
Owning rental property isn't without challenges, but the benefits are hard to ignore. From financial security and long-term wealth to personal growth and tax breaks, being a landlord can be one of the most rewarding investments you'll ever make.
At Hommy, we help new and experienced landlords get the most out of their rental journey. Whether you're just starting or looking to grow your portfolio, our resources at gethommy.com are here to guide you.
Ready to take the next step? Explore our platform to connect with quality property managers, learn best practices, and maximize your rental property success.