The Pros and Cons of Owning a Rental Property

When you have a vacant property that you cannot sustain anymore, whether because you live in a different residential area, or you just happen to be lucky to have many real estates and wealth. A great option would be leasing and make your real estate as a rental property and to make some rental income every month. This might be a more practical solution than selling your house and completely losing everything.

Hiring a service like the property management Rialto that provides you the necessary help in managing your real estate especially when you are not knowledgeable about how this works effectively helps you in your endeavor as a landlord. However, even if you have a property manager you can rely on, there are still things, both advantages and disadvantages, you need to know about owning a rental property, which is provided below:

Pros of Owning a Rental Property

There are many advantages that owning rental property has. First, it provides a monthly extra income. Second, it is a great investment as real estate’s value does not degrade, but rather it increases in each passing year. Third, you can live in it in times of emergency.

1. It provides income from property value growth

Since you own the property, you have the luxury of gaining an increase in the value that comes from the property. The good thing is you do not need to do anything but wait on gives you extra and when it is an emergency and you need more money; you can always sell the house.

2. It provides income from renters

The renters will give you a direct stream of income. You will be provided with an extra income every month as long as the renter stays in your property. The good thing about leasing is that your property stays yours, and you are just letting them borrow it for a while.

When you rent out your house for $1,000 per month, you will end up having $12,000 in a total year. While some people don’t think about it much, still it is a better gain.

3. The sweat equity

You will never have to deal with house maintenance and repairs without benefiting from them, as repairs and maintenance that you do for your own property also increases its value.

Cons of Owning a Rental Property

Yes, there are a few disadvantages of having a rental property, which includes:

1. Tenants may not be as reliable as they should be

There is no guarantee that your tenants, even the best ones will be able to give you the payment on the due date. Some tenants will not pay regularly, while others will not really pay at all until they get evicted.

2. You still need to play a role

As the landlord, your tenants are your responsibility, and if something happens in the house, you will need to give assistance. You also need to consistently interact with the tenants and your property manager.

3. There is a concentration of assets

Most of us will agree that having a rental property entails huge investment and time, and since your investment is in the property, it is not diversified, and undiversified assets is not a wise strategy.