The Benefits of Keeping a Rental Property
Jan 02, 2023
Written by David Dodge
The decision of whether to keep a property as a rental or fix and sell it will depend on a variety of factors, including your goals, financial situation, and the state of the local real estate market. Here are a few things to consider:
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Your goals: If your goal is to generate passive income, then keeping a property as a rental may be the better option. On the other hand, if you want to make a quick profit, then fixing and selling the property may be a better choice.
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Your financial situation: If you have the money to fix and sell the property, then this may be a good option. However, if you don't have the money to make the necessary repairs, then keeping the property as a rental may be a better choice.
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The state of the local real estate market: If the local real estate market is strong and there is a high demand for properties, then fixing and selling the property may be a good option. However, if the market is slow or there is a glut of properties for sale, then keeping the property as a rental may be a better choice.
Ultimately, the decision of whether to keep a property as a rental or fix and sell it will depend on your specific circumstances and goals. It's a good idea to carefully weigh the pros and cons of each option before making a decision.
There are several challenges that you may encounter when keeping a rental property, including:
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Finding and retaining tenants: Finding reliable tenants who will pay their rent on time and take good care of the property can be a challenge. You'll also need to be prepared to handle any issues that may arise, such as tenant disputes or maintenance problems.
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Dealing with maintenance and repairs: As a landlord, you'll be responsible for maintaining the property and handling any repairs that are needed. This can be time-consuming and costly, especially if you have multiple properties.
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Managing finances: You'll need to keep track of your income and expenses, including rent, utilities, maintenance, and repairs. You'll also need to budget for any unexpected expenses that may arise.
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Complying with laws and regulations: As a landlord, you'll be subject to a variety of laws and regulations, including fair housing laws and health and safety codes. You'll need to make sure you are in compliance with these regulations to avoid fines and legal problems.
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Managing your time: Being a landlord can be a demanding job, especially if you have multiple properties. You'll need to be organized and manage your time effectively to handle all of the tasks that come with being a landlord.
There are several costs involved in keeping a rental property, including:
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Mortgage payments: If you have a mortgage on the property, you'll need to make regular payments to the lender.
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Property taxes: You'll need to pay property taxes on the property, which can vary depending on where the property is located.
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Insurance: You'll need to have insurance on the property to protect against damage or loss. This can include homeowner's insurance, landlord insurance, and any other insurance required by your mortgage lender.
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Maintenance and repairs: As a landlord, you'll be responsible for maintaining the property and handling any repairs that are needed. This can include things like painting, fixing appliances, and making other repairs to keep the property in good condition.
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Utilities: You'll be responsible for paying any utilities for the property, such as electricity, gas, water, and trash service.
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Advertising and marketing: You'll need to advertise the property and find tenants, which may involve costs such as advertising fees and credit check fees.
It's important to carefully budget for these costs and to set aside money for unexpected expenses that may arise. Being a landlord can be a demanding job, and it's important to be prepared for the costs and responsibilities that come with it.
In conclusion
Whether to keep a property as a rental or fix and sell it depends on your goals, financial situation, and the state of the local real estate market. Keeping a rental property involves challenges such as finding and retaining tenants, dealing with maintenance and repairs, managing finances, complying with laws and regulations, and managing your time. There are also costs involved in keeping a rental property, including mortgage payments, property taxes, insurance, maintenance and repairs, utilities, and advertising and marketing. It is important to carefully consider these factors and budget for the costs of keeping a rental property to ensure it is a successful and profitable venture.
