pros and cons of renting out your property

The Pros and Cons of Renting Out Your Property

If you’re looking for ways to make some extra cash on the side, you may have considered renting out your property. While this is certainly a viable option, there are some factors to consider before you put you list your home. 

In this guide, we’ll walk you through some renting property pros and cons so that you will be prepared to make an informed decision. 

Renting Property Pros and Cons

Let’s start with some of the pros that homeowners benefit from when renting out their property. There are many positives to choosing to rent your home. But like anything else, there are some drawbacks, as well.

Pros of Renting Property

Generating Cash Flow

As a landlord, you are generating cash flow every month. You are collecting rental income to use as needed. If you are struggling to make ends meet and need some money, it would be easy to tap into your rental income.

Achieving Financial Independence

Renting out is an excellent way to achieve financial independence. The more properties you own, the more profits you generate. 

Owning property not only gives you another income stream; it can also help you attain financial freedom and independence. A lot of people use their rental incomes to supplement their day jobs—and some even make a living from renting out property. This is possible for anyone with enough money and the right skillset. 

If you’re just starting out in real estate, this might be a wise long-term investment strategy for retirement or college tuition savings account funds. It’s also a good way to invest in your home without having to sell it and buy a new one later on down the line.

Building Up Equity

One of the most important benefits of renting out a property is building up equity. This is especially true in expensive areas, where renting out a property can be a great way to make your mortgage payments and make some extra money in the process. It’s also a great option for someone looking to buy a home but doesn’t have the down payment yet.

When you rent your property out, you’ll be able to build up equity that will help you get approved for a mortgage later on. You may not need all of this equity at once, but it’s still nice knowing what you’re building up for later on.

Tax Deductions on Mortgage Interest and Points

A mortgage interest deduction is a deduction you receive for the interest paid on your mortgage. Mortgage points are prepaid interest which can also be deducted from your income taxes. If you’re a landlord, then these deductions are crucial because they will lower your tax liability and increase your net profits.

Making an Impact on the Community

Renting out your property is a great way to make money while also making an impact on the community. One way that renting can make an impact on the community is by filling up vacant properties. If you are living in a densely populated area with many houses available, it’s likely not hard for you to find renters. But what happens when there are vacancies? Renting your property can help fill vacant properties and contribute to the economic development of your area.

Cons of Renting Property

Tenant Risk

In what is perhaps the single biggest concern among landlords, tenant risk is the potential of your tenant not taking care of your property. This is a reality that’s all too common, and it gives pause to many homeowners looking to make some extra money on the side through renting.

Maintenance and Administration

If something goes wrong or breaks in your home, it’s not something you can put off. Rather, you’ll need to get it fixed right away. This can potentially create some issues on your end, especially if you’re out of town. A good way to counter this is to have a local handyman on deck.

Increasing Comfort and Safety for Current Home 

Some people rent out their properties to make a little extra money, but they don’t want to leave themselves vulnerable. What if their tenant doesn’t pay the rent? Or what if the renter damages the property or does drugs?

To protect yourself from these risks, you can take out a landlord insurance policy. This will protect you from any liability should something go wrong. So, before you decide to rent out your property, be sure that you get an insurance policy in place.

Moreover, you can reduce such surprises by scheduling a home inspection before you rent out your property. An inspection will reveal items that require attention, allowing you to address them and get them resolved well ahead of time. 

Do You Need to Schedule a Home Inspection?

Call Guardian Angel Inspections for comprehensive home inspections in South Florida. Whether you need a complete inspection of the home or specific items, such as the roof or pool, we are happy to accommodate you. To schedule your inspection, call (561) 512-7854.

The information in this blog post is for reference only and not legal advice. As such, you should not decide whether to contact a lawyer based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.