Pros and Cons of Owning Rental Properties

Owning rental properties has its share of ups and downs. On one hand you're happy that you have extra money from the rent to spare and on the other hand there are things you need to contemplate on like all those maintenance work that needs to be done.

There are several pros and cons when it comes to renting out your properties and it's up to you to choose if the good outweighs the bad.

Pros

Monthly Rent

Who doesn't want that? If you have multiple properties that you are renting out and if you know how to handle your money well; chances are you can save up for the rainy days. Say you are renting out each of your 10 properties for $1500 a month; that's already $15,000 in total and a whopping $180,000 in 12 months.

Just don't forget that you need to pay taxes and allot a portion of the rent for maintenance of the properties.


The Higher The Value, The Higher The Income

A property in the damp in the 80s may no longer be that way today. People are evolving and so are the communities around them. Your inherited property from your uncle that you once thought will only bring you headache in the long run has now become a coveted property because it's in a sprawling area where there are soon to rise lifestyle centers and educational facilities for the geniuses.

This just means that if you have a valuable property; the possibility of renting it out on a higher price is very feasible.

Hands On Work

If there are minute details that you pay attention to, to beautify the property and its surroundings and most especially when the house becomes so attractive because of all the dirty work you did; you can charge extra. The more pleasing to the eye the property is the more likely you will attract renters who are willing to pay extra for the workmanship.

Cons

Concentration of Assets

When you own a rental property; it means that most of your money can go to spending on it, why? Because first, buying a rental property is costly and if you're not "Donald Trump" rich then most of your life savings can very well go to funding all the things that are related to the property.

When something goes wrong with the property which is not included in the insurance clause; you will be forced to spend your remaining money on it just to salvage of what little of it is left.

Risky Tenants

Even if you've interviewed and re-interviewed your tenants, there are no guarantees that they can or will pay rent on time and that is a major setback. Even if you force them to move out the fact that months passed by and they didn't bother to pay is troublesome not to mention the hassle of dealing with all eviction, etc.

There are also tenants who don't care if they destroy the house and the surroundings because some are just born messy and destructive and there is a possibility that you will become a victim of it.

Insurance, Taxes and Fees

Whether or not there are people renting the house; property taxes, insurance costs and homeowner association fees related to the property is something you need to pay religiously, so when there are no tenants, you can expect that you will be shouldering the costs.

Your Involvement

Renting out your property can also be considered a job. You're not going to sit all day waiting for the money to come. There are damages you need to check, renters' disputes, maintenance work and even paperwork but you can hire a property manager if you want if this seems too much for you.

*When renting out your property, you need to make sure you are fully aware of your duties and responsibilities as the owner. By being a hands-on owner, you can be ensured of good earnings.