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Finding the right place to invest your money can be difficult... there
are so many investment opportunities that create a great return and
generate a large profit, but there are even more end up with very little
if any return and minimal profits or even losses. For the careful and
serious investor, real estate investment can generate a much larger
return than some other investments, especially if the property purchased
is used as a rental property.
Not everyone is born to be a landlord, however, and care must be taken
to make sure that you're not getting into something that will only lead
to problems down the road.
To help you to make the decision as to whether or not you should
purchase rental property, here are some of the pros and cons of buying
property for rental purposes.
Advantages of Owning Rental Property
Rental property can be a great way to make money, especially if the
property is well taken care of and lies in a good location. If the
property is low-maintenance, then the majority of the money that is paid
in rent will likely be a profit for you and the profit being determined
after all property taxes and other costs has been paid. As long as the
rental property is occupied, you should continue bringing in money...
and if the location of the rental property was well chosen and is in a
popular area, then you shouldn't have very much trouble keeping the
property occupied.
Besides the collection of rental, your property are tend to undergo
appreciation along the time and it is hedge against inflation.
Should your rental property begin to perform below your expectations in
regards to rent, you also will still have the option to sell the
property just as you would any other real estate though there may be
some legal restrictions if the property is occupied at the time.
Disadvantages of Owning Rental Property
Just as there are several advantages to owning rental property, there
are also several disadvantages that you should be take into
consideration. Since you are the owner of the property, you are
responsible for all taxes and costs associated with owning the
property... and these are due whether you've made a profit from the
property or not. You are also responsible for maintaining the property
in a stay able condition, and some of the repairs that may arise in
meeting this responsibility (such as repairs the leaking water taps or
cleaning up of health issues) can be quite costly if you never done it
on DIY basis.
Additionally, the income potential of rental property is based on the
assumption that the tenants will pay their rent on time... some tenants
are constantly delay and late with their payments, or may decide to
withhold payment altogether and force you to evict them. Another common
issue that faced by the landlord is the tenant never settle their
utilities bill upon they move out. The figure could accumulated beyond
their utilities deposit that you hold.
Landlord/tenant conflicts can sometimes even become legal matters that
can become bogged down in court and cost more than the issue that
started the conflict in the first place.
Of course, not all tenants will be bad... nor will all of them be good.
The advantages and disadvantages listed above are intended to show you
the potential for both good and bad experiences that exist when
investing in rental property. Consider both carefully so as to better
make your decision and to help choose your investments wisely. My
personal advise is go for property where close to university or college.
Rent your property there to either staff or student there. It would be
definitely better if you're dealing with educated tenants.
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