Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Landlord

What it is:

A landlord is an individual who owns real estate that he or she leases to renters.

How it works (Example):

Landlords may own either residential or commercial properties. They lease the properties to families or companies in return for monthly rent. As the owning party, a landlord's obligations include structural maintenance and repairs as well as property tax payments (typically built into the rent).

For example, suppose Bob owns a three-bedroom apartment that he chooses to lease for rent. A family enters into a lease contract with Bob, the landlord. The family agrees to pay him $1,000 each month for a specific length of time (usually one year) in return for the right to live in the apartment. 

Why it Matters:

By leasing their properties, landlords can generate cash flow that accompanies the appreciation in their properties' market value.

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