Using rental property as a form of investment can be quite profitable, but there are all sorts of misunderstandings that can cause property owners to end up losing money. Here are some of the most common property rental myths that people need to be aware of.
Turn a Profit by Finding a Cheap Property
When it comes to rental properties, cheaper is not necessarily better. It is important to remember that landlords are losing money anytime their property is sitting vacant. Therefore, picking a cheap property in an area where no one wants to live can end up greatly impacting finances. In many cases, the higher cost of a property is offset by the fact the landlord can charge a higher rent and will always have tenants lined up to rent the property.
Renting in an HOA Is a Bad Idea
Many people think that HOAs are just a big inconvenience. However, they can actually be very helpful for rental property owners, as long as the investor selects an HOA that allows renting. The big perk of HOAs is that they provide a lot of amenities that renters look for in a house. Things like neighborhood pools and sports courts can make a rental property stand out from other single-family homes.
Managing Properties Is Stressful and Time-Consuming
A major reason people do not want to start renting properties is that they think they will end up spending all their time arguing with tenants, handling noise complaints, or cleaning up properties. However, it is actually possible to turn property rentals into a form of passive investment. Landlords who want to be completely hands can get a property manager to handle day-to-day work for them.
Landlords Have to Handle All Maintenance
A big reason many people are scared of renting properties is that they think they will end up spending a bunch of time and money dealing with maintenance. While it is true that landlords are responsible for repairing things around the house, like HVAC systems or plumbing, general maintenance may actually be a tenant’s responsibility. Depending on how the contract is worded, tenants may do things like cleaning gutters or mowing the lawn.