Leasing your property to increase your income has a huge influence on your financing and credit history. Buying property is one thing and then keeping it vacant is another issue. Just buying property for investment purpose and then not maintain it properly will lower its value in the long run. If you give it out for rent than the income that you earn from this source also has to be shown n your total income. So, this is what is known as a catch 22 situation. so before you buy property and then lease it out, here is a list of benefits and drawbacks you need to know before you act-
- Renting out your property will provide you with an additional source of income, provided it is high enough to repay your loan and other maintenance expenditures.
- Possessing any property which has a likelihood of growing in value in the future is definitely favorable and will even result in huge profits at a later stage,
- Any real estate comes with its share of wealth benefits. above all, it is a place where you too can reside in if you choose to.
- If the property in view is a house or an apartment it will definitely depreciate with the passing years. And if the real estate of that particular area is not doing too well the rates may even go down drastically.
- Rentals are known to fluctuate and if the time is not right, it may not fetch you the returns that you had anticipated resulting in more loss than profit.
- Looking for tenants every time the previous one leaves, involves a lot of time and expenditure too. You may have to repair certain fixtures, repainting and other maintenance requirements before you can put it on rent to get a good rental.
It is also better to consult the experts in the field before purchasing and renting out property and see the effects it may have on your financial history.