You think you can just renovate the bathroom and bill the tenant for the work?? That’s not how reality works.
Rent can also only be increased once per year and the tenant is able to appeal to the Tribunal if it is too much and the Tribunal can order the rent to decrease.
In terms of risk: When building: unforeseen expenses like complex earthworks, no access to building supplies and environmental issues that can blow out construction times by months or even years (this actually happened recently with gib), and all the while having to pay the mortgage when there isn’t a house to live in.
When renting: property damage from tenants, meth labs (it will be illegal to rent a property soon with a certain level of meth contamination), things requiring repairs in the house (I recently had to buy a new heat pump because the old one died), changes to laws like the recent one that requires older homes be retrofitted with insulation at cost to the owner, tenants moving out leaving you with the mortgage to cover yourself, job loss myself leaving me with no way to cover the extra…
And nowadays, simply having someone paying your mortgage isn’t enough. Landlords need to be cashflow positive.
I showed earlier that mortgage payments are more than double rent payments.