Renting Properties is a very lucrative way of investing in real estate. You purchase a property and then rent it out to tenants who will stay in the house and in turn pay an agreed sum over a period of time. It is important to note that the landlord is responsible for paying the costs of maintaining the property.
Importance:
- Provides regular income as the rent are paid annually or an agreed stipulated time
- Properties can increase in value: As the commercial value of the property goes up, there is every tendency of the rent being increased.
- Leverages capital to maximize returns: Though a substantial amount of money is spent to build the house and make it look attractive, in the long run, you will earn more money from the house.
Challenges:
- Managing tenants can be tedious
- Tenants could potentially cause damage to property knowing it is the duty of the landlord to maintain his building.
