Two Sides of the Coin: Buying Rental Property
There are many avenues that one can branch out to when it comes to investing in property. Following the benefits that one stands to accrue from purchasing real estate, it’s apparent that many people are getting interested. In this piece, we are going to take a look at renting a property, the perks that come with it and its downfalls too. At Los Angeles Property Management Group, we boast of vast experience in property management and so we know a thing or two about rental property. Here goes:
Perks
Long-term investment
Investing in rental property makes for a long-term investment. Do you want to invest in a golden goose that will still be laying golden eggs many years down the line? Well, investing in rental property is the solution for you. Property, as you will find out, is always sought after. Also, a quick comparison to other markets will show you that property is more predictable. This indicates that it will be a long-term investment that will continue giving in the future.
Rent
Rent, of course, is a substantial motivating factor. You are assured of a stable stream of income monthly so long as your property is occupied. This means that you won’t have a hard time trying to settle monthly expenses, especially when you bought the property on a bank loan.
Value growth
Another benefit that you can reap from investing in property as a whole is the growth of value over time. This means that as years go by, your property will appreciate without you investing anything to it. However, you will get even more value for your money if you carry out thorough research before buying. For example, if you buy property in an upcoming area, it will increase in price significantly.
Flow of Tenants
In today’s market, the demand for rental property keeps growing. This means that the number of people looking for places to rent keeps growing in pretty much every state in the U.S. This means that you will not have a hard time trying to find tenants to fill your unoccupied units.
Downfalls
Uncertainty in rent payment
Even if all of your units are fully occupied, it’s not a guarantee that you will receive rent for all of them. This is because chances are some renters will not make rent. And even with the option of changing tenants, it still exposes you to the loss of a few months’ rents and time too as they are evicted.
Cost of maintenance
All of your tenants may be making the rent, but ruining your property in the process. This exposes your rental units to wear, and you will have to foot the additional costs of repair every time you switch tenants. In this case, you can introduce a security deposit which will cater for these damages.
Taxes
With the purchase of rental property, you have to brace yourself for monthly taxes when your units are not occupied. In this case, you will have to pay from your pocket. Therefore, regardless of mortgage and interest remaining fixed, taxes can still rise over time.
Time
Oblivious to many, being a landlord is time consuming. You have to set aside time to cater for needy tenants that are always demanding for constant visits and repairs. You will also be swamped with paperwork that will require your attention such as monthly installments and insurance. All this shows that investing in rental property will eat into your time, even though most don’t point this out. On the other hand, if you do not have much time to handle all this, looking for a property management company to manage your rental property will solve your problem.
Conclusively, before investing in rental property, do your research as this will help you make an informed decision. If you are looking for a property management company in Los Angeles, you can check us out here
