Real Estate Rentals – A New Concept
Real Estate Rental is very much a new concept in the United States of America. The reason why it is a new concept is that unlike a rental or a lease, the landlord of the property has the right to buy the property at any time. However, the main difference between them is that in case of rent there is no contract made between the landlord and the tenant. Read on to find out more about rentals and why they may be a better choice than buying.
In real estate rentals, the landlord has all the rights to the property. It is like a lease agreement, but for an entire property. In both cases the landlord pays rent to the tenant on a monthly basis, and then he resells the property to the buyer. The rent is usually fixed by the property management company, who acts as the middleman between the landlord and the tenant. As the owner, you pay a fee to the property management company, and this fee goes towards their maintenance costs, insurance premiums and so on.
With real estate rentals, the tenant has no choice but to pay the landlord. But this is not true with lease contracts. The tenant has the choice of taking out a lease or staying for a period of time in a house or apartment, without paying rent. Lease contracts are usually short term agreements. In case of longer term agreements, the tenant can buy the house at a low price or rent it out for a longer period. This is more common among students and families who are planning to settle down. So, in case of real estate rentals, the tenant has to stay for a period of time in the house, and then he can buy it.
Sometimes, the landlord might give a guarantee to the tenant that the property will be sold on time, or that it will be sold to the highest bidder, or that the property will be renovated and make it worth living in the house. But with real estate rentals, the tenant is not given such a guarantee, but the tenant has to pay the property maintenance costs.
Even though real estate rentals have become a booming business, people still remain hesitant about entering into a deal with property managers who charge high rents. People think that if they don’t pay the rent, then the property will go into foreclosure and they will lose everything they have invested in it.
This is the main reason why many people hesitate to enter into real estate rentals, because they fear losing their homes to foreclosure. However, the thing is that foreclosure does not happen in real estate rentals. There are plenty of foreclosures going on every day, and many properties are being repossessed by the banks. Banks are also interested in investing in real estate rentals because they will have less risk involved in the deal, and the amount that they will earn is higher.