Know Whether the Rental Income is An Important Source of Income or Not?
Apr 10, 2017 Legal Guidance
Generally, people feel attracted to an additional income that comes in the form of rent but in the long run, it may not be so profitable.Commercial property is always more advantageous against residential property, as it deals with a very good and steady rental.
But the residential rental income stream isvery much affected by the location of the property. In addition, lot of investment is made initially in essential fixtures and periodically investment in maintenance and management to ensure a good occupancy rate throughout.
However, a residential property to be generated as better income needs to go through long leases which can be done by the help of brokers only. But in such a case, a few months of rent could be lost to the waiting period between tenants and broker commissions. If we analyse today’s market we see housing loans are quite easily available and the trend of people choosing a rented accommodation is also decreasing, and the reason is because in the market people choose to rent rather than to buy.
The second thing which is important is the annual cost of maintaining and keeping a property in good order which will reflect in the annual cost of living.Beautification and development of a residential property is always costly since it will deals with superior interiors, good construction materials. There is an upcoming trend of booking flats which are termed as retirement homes where the owner will move may be say after 20-25 years down the line. So the maintenance in such scenario gets much higher. The tenant will always want the best for everything as he or she will be spending money for that. Treat the property as special asset which will over the time simply appreciate in value.
Hence needless to mention that investing in a property for rent purpose is definitely a profitable thought but one needs to see the pros and cons before buying so that his or her money does no go in vain.
But the residential rental income stream isvery much affected by the location of the property. In addition, lot of investment is made initially in essential fixtures and periodically investment in maintenance and management to ensure a good occupancy rate throughout.
However, a residential property to be generated as better income needs to go through long leases which can be done by the help of brokers only. But in such a case, a few months of rent could be lost to the waiting period between tenants and broker commissions. If we analyse today’s market we see housing loans are quite easily available and the trend of people choosing a rented accommodation is also decreasing, and the reason is because in the market people choose to rent rather than to buy.
The second thing which is important is the annual cost of maintaining and keeping a property in good order which will reflect in the annual cost of living.Beautification and development of a residential property is always costly since it will deals with superior interiors, good construction materials. There is an upcoming trend of booking flats which are termed as retirement homes where the owner will move may be say after 20-25 years down the line. So the maintenance in such scenario gets much higher. The tenant will always want the best for everything as he or she will be spending money for that. Treat the property as special asset which will over the time simply appreciate in value.
Hence needless to mention that investing in a property for rent purpose is definitely a profitable thought but one needs to see the pros and cons before buying so that his or her money does no go in vain.
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