Owning real estate rental property sounds like a dream. You have a solid piece of land that you can call your own. And if you are in such a situation that you can buy a condo in Austin without having to go into debt in order, all the better. But, owning real estate rental property is rarely all that it is cracked up to be. True, you may have certain advantages. But, the reality is that there are some serious disadvantages that you need to consider. Well, let's not dilly dally, and let's jump right into it.
The pros of owning real estate rental property
Let's first go over the pros of owning real estate rental property. Although these may seem obvious to you, we should go over them none the less. That way you will be familiar with any pros that you might not be aware of right now.
Income from rent
The best way to consider renting real estate is that it is a business. Your product is your real estate and your customer is your tenant. And, when it comes to business, you can hardly find a financially safer one. Every month you will receive the agreed sum. This sum may be large or small, depending on your negotiation skills and how much you invest in your property. But, it is safe. And, as any business person can tell you, there are no better earnings then safe ones.
Real estate has been considered for a long time as the safest possible investment option. A significant part of the U.S. economy was built upon people taking loans from banks in order to buy houses. Now, it is true that the real estate market has had its ups and downs. But, over recent years, it has climbed back to being one of the most trusted markets in the U.S.
Simply stated, renting real estate is a safe investment. You can easily follow the market trends and sell your real estate if you think that the value of it is going to go down. But, since more and more people are moving to cities like Austin, there is no reason to expect the drop in real estate value.
Meeting new people
An overlooked benefit of owning real estate rental property is that you get to meet new people. True, it is going to be an unbalanced relationship since you are going to be their landlord. But, if you are nice and honest about it, you will be making a lot of friends while renting out your property.
The cons of owning real estate rental property
The time has come to turn the coin and see the other side of real estate rental property. While receiving regular rent is nice and dandy, you will need to make certain investments. Apartments require maintenance in order to remain in the same condition. And, improving them requires even more time and money then regular maintenance does. You need to be aware of all the dirty little parts that go into owning real estate so that you are not caught off guard once you start to do so.
Owning real estate rental property comes with its own set of risks. Ture, once you own your property, you can sell it whenever you see fit. But, how are you to know when it is a good time to sell? It is not easy going into selling real estate after renting it. And, as any real estate agent will tell you, you need to quick in your decisions in order to sell real estate successfully. Every market has fluctuations and following them carefully is something you will have to do as a real estate owner.
Having a nice tenant that is going to pay their rent on time, keep your property in order and not cause any problems is rare. Very rare. So rare, in fact, that you shouldn't expect so. Usually, every owner has at least one experience with a really bad tenant. Most are in between. Some will be more messy, while others will be a bit late with rent. But, there is always the case that you will get one that truly sucks. Someone that will destroy your property and that you will have to go into legal battles with. That is a harsh reality of owning real estate rental property that you should be aware of.
Taking care of the property
What people seem to forget, even when preparing to buy their own home, is that you will need to invest time and money into your property. Now, you might think that this means little time and money, but you would think wrong. Real estate can earn you money, but you will need to invest considerably into it if you want to keep it in order. If you are handy with DIY projects you might spend less money and more time. But, if you are like the most of the U.S., you will need to pay for repairmen and carpenters to keep your apartment in good condition.
Final weigh in
At the end of the day, there are pros and cons to everything. Cest la vie. Whether the pros will outweigh the cons or will it be the other way around, is mostly dependant on you. If you manage your property correctly, stage your apartment nicely and pick your tenants carefully, you will have a wonderful and productive time renting real estate. There are many people who have made quite a lot of money doing so. But, you will not be able to do so if you are not aware of the risks. Know what is ahead of you in order to make good decisions and sound investments.