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Publisher Description

This essay sheds light on why rental properties are the worst type of real estate investment and also elucidates why storage facilities are the best type of real estate investment. Moreover, how to make money so that you can afford to invest in buying real estate is delineated in this essay.

In spite of their touted merits, rental properties are arguably the utmost worst type of real estate investment for a multitude of reasons. To the dismay of the investor, buying rental properties, such as single family homes, entails succumbing an exorbitant amount of debt financing which does not always culminate in generating positive cash flows, especially if the tenants renege on their lease agreements and desist from paying their monthly rent. At the end of the day, the property owner is responsible for paying property taxes, home owners association fees, homeowners insurance fees, continual home maintenance costs, and even other unexpected costs. The risks of owning rental properties over other types of real estate can be substantial, especially when you are dependent upon potentially irresponsible tenants to pay your mortgages for these rental properties.

Irresponsible tenants can be eminently difficult to evict from your rental properties, even if they continuously shirk off honoring their lease agreement by not paying their monthly rent. Moreover, as a property owner, you may have to pay exorbitant fees out of pocket to undergo the costly eviction process which can take months to finalize. Some investors would not even consider procuring rental properties since the massive risks can easily outweigh the upsides, especially when the the investor feels as though the tenants have more rights than the landlords. Additionally, ample investors are reticent about hiring an expensive property management company to deal with their property issues. Investors that cannot actively manage nor maintain their properties due to living far away from their properties may need to rely upon expensive property management companies to collect rent from tenants and perform maintenance repairs.

Buying rental properties is perhaps the utmost worst type of real estate investment. Starting a rental property business requires enormous start-up costs and the costs to remodel the rental properties so that they are suitable for tenants and in compliance with landlord-tenant regulations and laws can also be exorbitant. Moreover, “any damage to the foundation, plumbing, or wiring can cost thousands of dollars to repair. But even if you buy a property in good condition, you may still have to make changes to get it up to code. This is because many states have strict requirements for rental properties that will need to be met before you can start renting” (Colley, n.d.).

Rendering rental properties up to code can easily costs thousands upon thousands of dollars. Additionally, unexpected property maintenance repairs can add up to thousands upon thousands of dollars overtime and render the investment of owning rental properties far less profitable than presumed. “Landlord and tenant laws require that you make serious repairs quickly. If you do not then you could be held liable for additional damages” (Colley, n.d.). If you are not contracted with a property management company then the costs to make emergency repairs can be almost cost prohibitive on the landlord’s end.

Another salient issue associated with becoming a rental property owner goes beyond having tenants who completely abstain from paying their monthly rent. Having to deal with the costly and time consuming eviction process is an onerous burden that can render rental property ownership all the more of a hefty net loss on the investor’s end. Additionally, much to the landlord’s dismay, tenants can potentially taint the walls with “graffiti, pour concrete in the toilets and sink, allow mold to fester in the appliances, and also make stains on the floors” (Colley, n.d.).

Business & Personal Finance
Steve Miller
hr min
4 February
Dr. Harrison Sachs