What Do You Mean by Real Estate Renting?

Posted On Jun 18 2016 by

rent vs buyReal estate investments is a lucrative investment option due to two reasons. First reason is that even though the growth rate of the investment may be slower, it will definitely offer you great returns when you will sell the property after some time as the rates and value of the properties is always increasing.The second reason is that you don’t have to wait for some time to start earning income from real estate as you can rent the property to a tenant and start earning a sizable amount as a rent for your property. So it means that investing in realestate can offer you instant gains.

Before you make any decision regarding real estate renting, you have to take into consideration, both the aspects of renting a property. It means that you have to study the advantages as well as disadvantages of renting your property. It will give you information with which you can make a balanced decision.

Advantages of giving your property on renthouse-for-rent-sign_large

  • The most important advantage of renting a property is the direct income source from the rent paid by your tenants. Which means that you can start earning as soon as you purchase a property if you rent it immediately. This can even help in offsetting the monthly mortgage loan repayments.
  • As the values of your property will also increase after some time as there will be growth and development in the locality, you will also get higher price for the property at the time of selling it.
  • If you keep your property well maintained and in perfect condition, it will also increase the values of the property and you will also be able to charge more rent from the new tenants.
  • You will also be able to claim tax deductions regarding the rented property.

Disadvantages of renting a property to a tenant

  • Investment in a property may lock a large amount of funds or debt taking capacity, which may Direct-Line-22-upd_2517723bmean that you won’t be able to invest in other options for some time.
  • There is always the risk that the tenant may not take care of your property and can cause a damage to the property which may affect its market value. It is also possible that the tenants may not pay the rent regularly and you may suffer the loss of rent.
  • It will be your responsibility to keep the property in proper shape as the owner of the property and it may cost you a lot of money.

Real estate

If we take into consideration both that is advantages and disadvantages of real estate renting, we have to say that the advantages of giving a property on rent are outweighing the disadvantages. This is because you can minimize the risks related to tenant’s behavior or loss of rent by taking certain precautions while selecting your tenant. This way you can ensure that you are getting the rent income and the condition of the property will be maintained and the value of the property will also increase.

Last Updated on: June 18th, 2016 at 6:37 am, by Lisa Clark

Written by Lisa Clark