The Pros and Cons of Owning A Rental Property in Orange County

Owning a rental property can be a great way to create extra income. But like any investment, it comes with its fair share of pros and cons. Here are a few things to consider before you begin investing in rental properties.

Pros and Cons of Owning A Rental Property in Orange County

The Pros:

Someone Else Pays Your Mortgage! 

Sounds great right? Well, it really can be if you have the right tenants! Owning a rental will create an income stream you can use to pay the mortgage itself. With the right rental, you will create enough income to pay all of the operating expenses for owning it, plus a profit on the side.

People Will Always Need Somewhere to Live

Real estate is a sound investment. Andrew Carnegie once said, “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” If he was alive today, he would be worth $309 billion.

Income Tax Deductions

You can deduct all sorts of things on a rental property. You must keep detailed records and receipts of everything you intend to write off.

  • If you have a loan on it, the interest can be deducted
  • Travel and mileage costs to visit, repair and inspect your rental property
  • You can deduct maintenance and repairs. This includes everything from a new roof to replacing a light bulb.
  • HOA Fees
  • You can deduct any portion of the utilities you are paying for

Retire in Style

Have you found a home you love? But maybe it’s not in the ideal location for your work commute. Or maybe it’s not the right size for your family. It’s never too early to think about retirement! If you find a home you absolutely love, a strategy many use is to purchase it and rent it out until they are ready to move in! The home can usually pay for itself, and you are able to hold on to your dream home.

Passive Side Income

If you get all your ducks in a row, and have a low-maintenance rental with great tenants, owning a rental can be excellent passive side income.

The Cons:

You Get “No Respect!”

Aside from the usual wear and tear, some tenants will do little to nothing to take care of the home. While you are in charge of maintaining a livable house, you cannot control what they do. You could have to deal with a hole in the wall broken windows of faulty plumbing you haven’t been made aware of.

You Might Get Sued

Hey, it happens. People could take you to small claims over a deposit you kept, or an injury sustained on the property. Their claims can be frivolous and without merit, but it can still take time and energy to deal with.

Additional Costs

The home needs to be properly maintained. Even if it is in the lease that they are in charge of mowing or maintaining the pool, it ultimately your investment. The repairs and yearly costs to maintain the property should be considered before you make an investment.


Plain and simple, being a landlord can be stressful. If you get a high maintenance tenant, your phone could be ringing at 11 at night because they saw a bug. In addition, if the rental becomes run down over time, the repairs bill could be continual. Also, with some tenants, you might be chasing down your rent each month.


What happens if the price of rental drops, but your mortgage stays the same? Or what if property taxes go up, but you are not in a place to increase the rent? You will want to consider all scenarios and make sure you have some wiggle room with the rent you are charging. Don’t cut it too close that you get yourself in a bind. In addition, financing the second property can have additional hurdles before a bank can help with financing.

As with any investment, make sure you thoroughly research the pros and cons. Find a property that will be low maintenance and make sure to thoroughly screen all prospective tenants!

If you want to learn more about owning a rental property in Orange County send us an email now or give our team a call today! 949-625-4533




Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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