The Pros & Cons of Rental Property Ownership

If you are looking for an investment opportunity to add to your portfolio, acquiring a rental property is a very attractive prospect, and for many Australian investors, letting out their second property offers a good return. Of course, as with any investment, there are risks involved with rental properties, and with that in mind, here are a few pros and cons to help you make the right decision.

The Pros of Property Rental Ownership

If you buy the right property in the right location, you can expect to enjoy top rental, and with the tenant paying your mortgage for you, plus a little profit into the bargain, investing in a rental property has great potential. As a landlord, there are many responsibilities, which include building maintenance and repairs, and most owners will outsource the property management to a company such as Rise Property Management, who take care of everything on your behalf. In fact, your choice of property management provider could be the difference between a profit and a loss, so it pays to really do your homework before making a decision.

Building Maintenance

Every building requires regular maintenance, especially one that is rented out to a tenant, and by enlisting the help of a good property management company, they handle everything on your behalf, including sourcing tenants, collecting the rent and also maintaining the property. Unless you happen to be an experienced builder with a lot of time on your hands, you are advised to outsource the building maintenance to a company that does this for a living.

The Cons of Rental Property Ownership

There are risks involved when buying any rental property, which could include unforseen serious building repairs, letting your property to an unsuitable tenant, or not being able to find a tenant. As you would expect, the location of the property is critical, and it needs to be in very good condition before you can put it on the market for rent, and even then, it is possible that you won’t receive the rent you had hoped for. Making a profit is what rental property ownership is all about, and if you aren’t careful the considerable expenses might result in zero profit, or even worse, losing money on the project. The main reason why a property owner fails to make a profit is a lack of knowledge as to exactly what is required by a property landlord, and if you try to maintain the property yourself, you could end up paying a lot more than you need.

Prior to making any commitment, it is vital that you crunch the numbers and are fully aware of your liabilities as a landlord, and with the help of an established property management company, you can leave everything in their very capable hands. Calculate how much it would cost to purchase a desirable property, while also factoring in the cost of making the property habitable, plus you need to seek out advice regarding capital gains and other financial aspects of owning a property for rent.