subject: Rental Ownership Woes – The Good And Bad In Renting Out Properties [print this page] Rental Ownership Woes The Good And Bad In Renting Out Properties
There is no doubt that real estate investing is great businesses to be in if you are looking to make a great income. However there are a few things to consider before you make the first steps and this is particularly true if you want to become a rental property owner. Obviously this is a great investment to have but there are a few drawbacks, not all of them financial. You should consider all of these before you buy your first rental property.
Firstly you need to consider who is to manage these properties. Most people start out managing the properties themselves and quickly discover that they are on call 24 hours a day, 7 days a week. You will be called out to handle property issues such as electrical and plumbing problems, leaky roofs, heating breaking down, noxious fumes and windows not opening. Many of these problems happen at odd hours of the day and night and your tenants will have your number and will not be too shy at using it!
Secondly, every month you will have to collect rents due. You will hear all kinds of sob stories, some of them true, many not. It takes experience to discover which is which and a heart of stone to ignore the please of those in trouble. It is this reason, above all else that has the landlord reaching for the contact details of property management companies. Unless you can treat rent collection, management and eviction proceedings as a business you will never enjoy your investments.
Thirdly, unless you have great tenants and new buildings there will be an almost constant need to upkeep and repair your rental buildings. Sadly tenants often do not treat their rentals with care and there is always a need to clean, paint, repair and replace between tenants, if not sooner. This is time consuming and expensive and of course when you are doing this between tenants, you are not receiving rental income.
Finally, there is the need to keep your property constantly occupied in order to pay your loans and maintain your income levels. If you have a high tenant turnover or poor tenants this becomes more and more difficult. Of course, one solution is to choose good tenants and treat them well. This takes a mixture of luck and experience.
Owning rental property can be very rewarding financially and emotionally but it is a lot more work than many people believe it will be. Rental properties require long term commitment, the holding of long term loans and a lot of work in their upkeep. If you are still keen to make this your own profitable investment in the future, then factor in the need for the services of a property manager as you become bigger and busier.
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