There are two ways landlords can make money after they are satisfied with the condition of their properties: renting or selling. By completely selling off your property you will get a massive and instant return on investment and will not need to continue to concern yourself with the condition of the property. However, this blog will concentrate on the renting options, analysing the pros and cons.
For starters, one advantage of renting would be the fact that the property in question is still under your ownership and therefore your control. This means that you can take still take advantage if house prices rise in certain areas. You can also continue to develop the property and raise its value. Therefore you can make money off the rent whilst making the property more valuable to sell once you feel like it is the right time to sell it.
Following on from this, the money you would make off renting compared to selling will most likely be more in the long term. Furthermore, depending on where your property is located, the price you can charge for rent can be substantial. In major cities, especially london, the rent prices can be almost surreal. If you have multiple properties that are providing rent money then it can result in a steady income for you. However, it will definitely take a while to even out your costs, especially if you have spent a lot of time and money on renovation, modernisation etc.
Such costs may increase over the time as you are still responsible for the maintenance of the properties as they are still under your ownership. Making sure furniture, plumbing etc. is in good condition can be costly, especially if your tenants are reckless. If these tenants are a nightmare, then it can result in a very sticky situation for you, another big disadvantage of renting. The internet is full of tenant horror stories, whether its being really messy or not fully paying the set rent. If you sell a property to someone who goes on to mistreat it, it’s there problem not yours.
Overall, renting’s pros and cons are too even for a decision to be really made on its effectiveness. The money and control you receive allows for future property projects to be developed. Yet, the effort needed for the maintenance of the property and if the tenants are undesirable may outweigh any benefits you can gain from it. Therefore it is a risky business to get into. Yet, if your renting activities are properly managed, it may turn out to be a great success.