“Don’t wait to buy real estate, buy real estate and wait.” – T. Harv Eker

I’ve lived in the expensive real estate markets of northern and southern California for most of my life.  When I relocated to Denver, CO for work, I was able to purchase a home due to prices being affordable – virtually half the price of a similar home in California. 

My plan was to buy a home with the intention of living in it, and then rent it out in the event I relocated again for work. 

There were several variables that made my Denver property an ideal location to attract potential renters’ interest and have a solid pipeline of tenants for years to come.  For example, it’s a reasonable 30-minute drive to the airport, the location is within 15 minutes of downtown Denver, it’s relatively close to a university, and it’s walking distance to public transportation, shops, a movie theater, a gym, and restaurants.  When I relocated out of Denver, I officially became a landlord and have rented out my property there since 2016.

While I’ve certainly experienced the “dark side” of being a landlord, given my interests and temperament, the benefits of landlording outweigh the hassle.

1. Monthly Cashflow

Receiving cash above the mortgage payment every month is a beautiful thing.  Once the mortgage is paid-off, the extra cashflow enables even more flexibility to invest in other endeavors.

2. Property Appreciation

The advantage to buying a property in a good location is that its value will generally increase over time.  According to both comparables in the area and estimates on sites like Redfin, my property increased in value +24% in the last 3 years!

3. HOA Peace of Mind

My rental property’s Home Owner’s Association (HOA) handles all exterior maintenance, landscaping, and snow removal.  This reduces my headaches and it’s a nice selling point for potential tenants when they realize they won’t need to shovel any snow.  I also have peace of mind knowing that the HOA will enforce standards that will ensure property values in the area will continue to appreciate.

4. Providing Shelter

Rental property is both an investment for me and a tangible asset for my tenants to use.  Mutual funds and retirement accounts are wonderful, but having a cashflowing investment that provides the benefit of shelter to people brings me joy.

5. Tax Advantages

Landlords have access to several tax deductions.  Consult your CPA, but some of my favorite include:

1. Mortgage interest
2. Depreciation expense
3. HOA dues
4. Insurance
5. Legal & professional services (IE attorneys & accountants)
6. Property management fees
7. Repairs & maintenance fees
8. Unreimbursed utilities
9. Travel expenses to-and-from the property (IE flights & rental cars)
10. Office supplies

Key Takeaway

Being a landlord isn’t for everyone. There are resources like property management companies to handle day-to-day operations for for those who aren’t drawn to being constantly “on-call”. If you’re interested in exploring rental property, contact people who have been landlords for a while and pick their brains. Watch YouTube videos, read books and blog posts to glen wisdom from people who have done it before. Learning from your mistakes is great – but learning from other peoples’ mistakes is much better.

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