Figuring Out Your Costs of Being a Landlord

Are you thinking about being a landlord? Being a landlord and owning rental property can be a great way to diversify your investments and generate a great source of income. However, as with any business, being a landlord has many costs associated with it that you should be aware of. Here are some things you need to consider when becoming a landlord.

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The Basics

The basics of being a landlord include the costs of your property and insurance. Just like any property, you will most likely have a mortgage and insurance that you will need to pay for each month. You will also need to make sure you plan for property taxes, and possibly special taxes related to being a landlord (depending on your location). Also, you could have to pay for utilities for the property, such as water and sewer, depending on how the meters are setup on the property.

On Going Costs

Being a landlord also involves other ongoing expenses depending on the property and your landlord skills. The first one is landscaping and yard maintenance. Most landlords hire someone to maintain the yard, but others do ask their tenants to maintain the property. However, having tenants maintain it could be risky as the landscaping may die or become overgrown.

There also could be maintenance required for the property. For a lot of basic maintenance, you may be able to take care of it as a landlord, but other maintenance or repairs could require a professional. Start building a network of reliable contractors early on so that you know you can get fair pricing quickly if needed.

Other Potential Landlord Costs

Finally, there may be other potential landlord costs to take into consideration depending on your personal situation. First, you may want to run a background check and credit check on potential renters. This will cost you about $10 per renter.

You may also want to join an association for landlords, such as the Apartment Owners Association. With these associations, you can get credit checks and legal documents, such as leases, for free. However, you will have to pay annual dues and other fees as well.

You may also want to consult with an attorney if you want to have custom legal documents drawn up (such as leases), or if you run into problems with a tenant and need to evict. This can be very expensive depending on the type of services you need.

I know becoming a landlord is something (I hope) that I have in my future, but knowing what you’re getting into prior and educating yourself is extremely important. Do you currently own any rental property? How has your experience as a landlord been?

Picture by FreeDigitalPhotos.

About the Author

By , on Oct 18, 2012
Andy Tenton
Andy is a 30-something New Yorker who turned his financial life around. He took charge of his finances, got out of debt, and is now working his way toward financial success. He is the publisher of

How to Become Rich e-Course

Budgeting 101


  1. We have just begun this journey, but I would say whatever you think your time line for finishing a remodel/repair and/or getting a renter is, add another few weeks. I though we’d go in, knock out the repairs and renters would be beating down the door. They are, but they are low quality tenants who can’t pass the credit check. I’d make sure the carrying costs aren’t too much so that you can get a good tenant who will be able to pay rent even if it takes a few weeks.

  2. CF says:

    We have one rental property right now. Our taxes and insurance are included with our mortgage payment (sort of, long story…) but we do put away $20-40 a month just for incidental repairs. It doesn’t seem like a lot of money to put away, but we already have several hundred dollars. We’ll at least have enough to repair or replace an applicance, if we ever needed to.

  3. We rent out a duplex and have found it to be really satisfying, but not really “passive”. Mr. PoP does all the yard work and many of the repairs himself, so that cuts down on costs.
    In general, there might be some carrying costs, but we find the best thing to do is to have the utilities be in the tenants names – that way we’re not at all involved in the process and don’t have to worry about spiking utility bills because the tenant put the AC on and left the door wide open all day.
    As for taxes and everything else, you should be able to have a pretty good idea of what those expenses are before you buy, and if it’s anything like the county we own in, there are caps on how much they can increase yoy. So you just account for those worst case scenarios. If you’re still making money, then it’s probably worth it! If it cuts it too close… well, maybe not worth it.

  4. Pauline says:

    I am a landlady and I think the biggest cost is the time you put in. They say it is passive income, well it isn’t. I have had to deal with maintenance requests, but also tenants not getting along with each other, and that takes a lot of time, and time is money… Otherwise, it is a great way to build wealth!

  5. Seems to be a lot of articles on real-estate investing lately… all of which I enjoy. I currently don’t have rental property, but do one day want to own real-estate (besides my house). I’m hoping to get into commercial real-estate instead of residential. I could be wrong, but it just appears to have a lot less hassles with crazy renters tearing things apart.

    I agree with Sean above. Having good tenants has to be the #1 priority. It seems to be the reason people either enjoy owning rental real estate or hate it.

  6. I’m a big fan of being a landlord, but I wish I had a multi-unit property instead of a single family home. When there is a vacancy, it really hurts. However, with multi-units, a single vacancy doesn’t totally kill your cash flow.

  7. I am not currently a landlord but like you my plans are to become one in the near future. From what I have heard from other friends the selection process seems to be a key aspect of making the whole the work. Not to much hopefully you are renting a space that doesnt come with its own set of problems. One of my family member uses a management company and says its worth paying the fee to have someone else deal with the issues that may arise.

  8. Eddie says:

    I’m not a landlord yet, but I’m hoping to become one withing the next 2-3 years.
    Ideally I’m planning to flip my current mortgage into an LOC, and use some equity/cash to buy my self another home to live in. I’m homing the renters will pay the remainder of the mortgage off.

    There are many scary sides to being a landlord, but educating yourself ahead of time so one knows what they’re getting into is key. That being said I know quite a few associates who are doing well with multiple rental properties.

  9. Excellent tips. This post does bring to your attention the ongoing costs and the costs you shouldn’t forget

  10. I am a landlord and you have to factor is many of the same things are you do when you own a home for yourself. You need to make sure you have a little wiggle room in your profits to be able to cover anything that might go wrong with the house. The biggest thing is making sure you have good tenants. Even though they have paid a security deposit it can still end up going very wrong if they do a lot of damage.

  11. Good post. I am not a landlord, but it is definitely something that would be possible in the future. There are a lot of costs associated that many don’t think of when they get in to it.

  12. Where I live if you rent for less than a 6 month lease you have to pay a bed tax… the joys of living in a tourist destination!

  13. Michelle says:

    I’m not a landlord yet, but I have thought about buying property and becoming one. There are so many things to think about, and all the negatives kind of scare me.


    Weird timing! My guest post at Get Rich Slowly today is about being a landlord!!!!

    In summary, being a landlord can definitely be a pain…but believe that the financial rewards make it worth it!

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