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Article published by : navjeet on Thursday, November 13, 2014 - Viewed 955 times

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Category : Real Estate

The Pros and Cons of Rental Real Estate



Rental real estate investment is a great idea as it can help you to earn extra income. You can find a property in an area that is in demand and then find tenants to see the cash roll in. But as there are no free lunches, some factors are required to be kept in mind before putting your property up for rent.

The advantages of leasing real estate:

Landlords can avail substantial benefits of leasing their property. One of the most important benefits of owning a property is that you own a physical asset that can help you to earn money when you are in need of it. Some of the various other advantages include:

• A source of your current income

The current income can be defined as the rent money which is left after paying all the expenses and mortgage payments. It is the monthly cash that is received by the property owner without working for it. This is the money that is produced by the property for the owner.

• The appreciation value

As time passes, the property experiences an increase in its value but it is not always guaranteed. On the other hand if your house is located in a stable area, its value can increase with the passage of time. Sometime, properties that are present in sparsely populated area can also experience an increase.

• Leverage on the rental property

It may be possible for a landlord to purchase his rental property with the help of borrowed funds. In other words, this means that the property can be purchased by putting down only a small fraction of the total value. However if in the end you are not able to pay the debt, you would only be losing your rental property and not your home.

The disadvantages of leasing real estate:

Along with the upside there comes a downside as well and the real estate market is no different. A landlord may be faced with certain disadvantages which include:

• Liability to tenants

With the increase in the number of frivolous lawsuits, liability is often seen as a disadvantage by the landlords. As a landlord, you have to be certain that your house or the rental property meet all the property codes laid down by the government.

• Unexpected expenses

Unexpected expenses can come up sometime that can take the landlord in for a surprise. Various issues like plumbing problems, change of fixtures of boilers are not calculated as major expenses but a faulty wiring or bad roofing can be an expensive deal. Moreover if the property is not present in its best shape, it may not attract potential tenants which may cause you heavy loss.

Therefore when you plan to lease out your house, remember to keep the disadvantages to the minimum. Try to keep a balance between efforts and earnings and remember to keep reasonable expectations. The assets must be inspected at regular intervals to find any fault in the house which can later on turn into an expensive affair.

We, being one of the leading harjirealtors Property Agents Punjab strive to deliver complete real estate solutions to our clients. Whether you are planning to invest in commercial property or residential realty, get in touch with us to turn your investment venture into a success. To know more about us, visit our website http://www.harjirealtors.com

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Keywords: harjirealtors Property Agents Punjab

By: navjeet

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