Being a landlord is definitely not a easy way to make extra money. Renters can be very demanding! You learn a lot and you can scale the business, but its tough to get into it.

Moneyes wrote: There is also the option of buying a duplex. Live in one apartment and rent out the other. But continuing to rent? There are better financial options out there.

I agree. The only way I could see this working is if she lives somewhere very expensive to buy or where there just isn't property available, and wants to buy property somewhere very cheap but not practical for her job, or if she's planning long-term to move into the buy-to-rent property when she retires and just wants to rent it to cover the mortgage on it so it is paid off. Property is a good investment, but being a landlord has a lot of overheads and work.

There is also the option of buying a duplex. Live in one apartment and rent out the other. But continuing to rent? There are better financial options out there.

That is a great example of a situation where that works out perfectly. Thank you for sharing!

I have a friend who bought a house after years of renting. She decided to rent a room to a college student with good references. Works out for her, as the student is serious about school and spends most of her time at the college. The extra money pays a good chunk of her mortgage.

Egghead wrote: Thanks for the replies Cents and Fran. I will raise your comments with her and see what she is thinking. I think she would be better off buying a place and then renting a room to someone. that would make some extra cash she could out towards paying down the mortgage, or even saving to buy another.

This is also my thought, mostly because I feel that the price will be more negotiable this way, which is probably more ideal to get many (long-term?) clients in the end. It also depends on the location and environment of the place rented, so owning the place will be safer.

Let us know what your friend decided.

It isn't what you are missing egghead, it's what your friend is missing. If her only logic in wanting to be a landlord, which is essentially what she will be, is that the income generated will pay her own mortgage and then some.......your friend isn't thinking things through. I could sit here all day and rattle off the future expenditures your friend will likely come across, but I don't have the time right now.

If I were your friend I would take a month and really study up on what it takes to be a successful land owner/landlord.

That's not a bad idea if she can stand having a stranger in the house. Whatever she ends up doing, please let us know. I'm curious to find out what the best situation is in her case.

Thanks for the replies Cents and Fran. I will raise your comments with her and see what she is thinking. I think she would be better off buying a place and then renting a room to someone. that would make some extra cash she could out towards paying down the mortgage, or even saving to buy another.

This is an interesting question and I'm not sure there is a concrete answer as to what is best. She should probably crunch some numbers and see what will be coming in from the rental property versus what she'll be putting out for her own rent.

I can kind of see what her logic is, but she should really think about getting out from underneath her rent payment first. If she buys property for someone else to rent, she'll still be building equity, but why continue to make rent payments yourself if you don't have to?

My cousin has had a bit of a windfall and she is convinced that buying a property (cash) to then rent out is a good investment for the future, despite not currently being a home owner herself. Her thinking is that so long as the rental income is higher than her current home's rental payments she is getting ahead somehow. Me? I'm not convinced. Am I missing something?