The Basics of Real Estate Rental Properties

A rental property can provide you with a steady income and an excellent opportunity to grow. According to the US Census Bureau, there are over 48.2 million rental units in the country. Many of these are single-family homes and townhouses. Before investing in real estate, it's essential to consider the various expenses and costs associated with buying and leasing a property.

Understanding Rentals 

As the values of homes increase, more people are turning to the rental market. However, this type of investment can also pose some risks. Before making a decision, it's crucial to thoroughly consider the pros and cons of this type of property.

Pros and Cons of Rentals 

Aside from being beneficial, rental properties can also have financial implications. Understanding these risks and rewards is vital to ensure you make the best possible investment.

Pros

- Profitable income: With rentals, two different incomes are coming in. Monthly rent from the tenants as well as property value growth 

- Tax Deductions: One of the most significant advantages of investing in a rental property is that it can provide you with tax deductions. This can be done through the use of various expenses such as property insurance and mortgage interest.

-Inflation Protection: Real estate can limit inflation; although the economy has been experiencing various ups and downs, single-family homes have been performing well.

-Asset Buildup: When buying a residential home and being able to rent out the space, there is a chance that you may only be paying between 10 to 15 percent of a mortgage. 

-Income Predictability: Rentals have expenses and income that are expected, which makes it easier to budget money.

Cons 

- Difficult Tenants: There is a risk when having tenants that won't always be the perfect ones. The risk of the property being destroyed as well as tenants not making their monthly payments is a risk. 

- Neighborhood Decline: At one point, that neighborhood had great income potential but, over time, can decline in value. This can include local politics and failed projects for redevelopment. 

- Regular upkeep: Some rentals, more than others, can need more maintenance upkeep. This takes time and extra money that might not be there. 

-Active Involvement: Having real people living in these properties also means interacting with them. Fixing things on the property, taking care of documentation, and being involved will make the process much smoother. 

-Vacancies: These are when the rental doesn't have tenants currently living in them. Not having anyone in the rentals means no income coming in from that property.

The Challenges of Rental Properties 

Getting into the rental property business is a hands-on process, and many obstacles can prevent you from making a successful investment.

Upkeep 

One of the most important factors that you need to consider when it comes to investing in the rental market is the regular upkeep of the property. Doing so will allow you to solve any issues that arise.

Property Tax Hikes 

Unexpected property tax increases can be a concern for investors if the rent is not enough to cover expenses. This can lead to a break-even or even a higher bill.

There are lots of factors to consider when looking into purchasing a property and renting it out. It can be a very fulfilling opportunity if done right and with great circumstances. Doing research and time management are key factors in this process. 

About Zoubir Ouarti

Zoubir Ouarti is best known with the people who work with him as a talented construction specialist and small business entrepreneur with over a quarter of a century of experience. Currently, Zoubir is the owner and President of Zoubear Construction. Zoubear Construction is a company that specializes in home remodeling and home restoration projects. Zoubir prides himself on the quality of his work and the network that he's built throughout his career. Because of the relationship that he has with his customers and his reputation in the real estate industry, Zoubir is most often the first person contacted when someone is going to list a house for sale.

Zoubir Ouarti graduated with a Bachelor's degree in Political Science and Economics from NYU's School of Professional Studies. Zoubir is known throughout the world to be a hands-on and attentive leader, someone who monitors both the overall company as well as individual employees. With a background in small business, Zoubir has the ability to understand clients issues and deal with them personally, conduct consultations, give exceptional individualized care, and draft winning proposals. The team that he's assembled over the years is the best of the best at what they do. He's made sure that his company is as diverse as possible, so they have experience for anything. Baseboard installation, basement, and bathroom remodeling, concrete repair, crown molding installation, countertop installation, deck construction and repair, drywall installation and texturing, and home expansions are all part of this service. To learn more about Zoubir Ouarti, be sure to check out his websites!