Rent vs Buy
Rent vs Buy
Rental property, also referred to as letting or renting, is a legal agreement in which a fee is paid for the right to use a particular property, a service owned by another person. A monthly rent payment is usually made by both parties and a gross rental lease is the one where the tenant only pays for a monthly flat rent amount and the owner pays for the entire property cost regularly incurred by his ownership. A rent-to-own property allows a buyer to take possession of the property and live there for a specific time period. This is often done to tenants who live in rented accommodation but want to buy their own home at a later date.
There are many benefits in renting or buying a rental property. In fact, there are so many that they make the process easier and quicker in most cases. However, there are also several negative aspects of renting that you should be aware of before taking a final decision on any type of property.
First and foremost, let’s discuss the disadvantages of renting or owning a rental property. One of the major disadvantages is that you may not be able to afford to purchase your own home later. If you are not planning on selling your rental property soon, this disadvantage is not applicable to you. However, if you have an immediate need to buy a property, it may prove to be detrimental. When buying property, you will have to pay property taxes. These taxes are usually based on the square footage of the property, so if the property is big, the amount you pay in taxes will also be large. Also, a lot of people avoid buying rental properties because of the additional burden it has on their finances.
Another disadvantage of renting or owning a rental property is that you will not have to worry about the security of your rental home. With a mortgage, you would have to pay a property tax and you would have to pay a deposit for the security. When you are renting, there is no mortgage to worry about. However, some rental properties have been reported to have very low security.
It is difficult to sell rental properties because of the nature of the business. For many rental owners, their business is small and they may only have a few units. Therefore, they are not interested in listing their properties in local real estate agents.
There are also other disadvantages for renters and owners of property. When purchasing a property, you will have to pay the full cost for it, unless you own it through a mortgage. So if you have to pay property taxes on your rental property, you will have to shell out for it.