Every real estate investor dream is to buy a house, give it out for rent and make profit out of it. On the verge of retirement, the mindset changes where they would like to sell off the house and live in a rental apartment.
DC Fawcett, real estate mentor gives his reviews on buying and renting a house, it pros and cons.
Buying a house
At the time of purchase, the buyer has to mention down payment amount which makes the offer valid. The amount varies depends on credit points and mortgage loans.
To make sure that the offer and actual price are equal, home appraisal is suggested by the lender. Home inspection is must, if there are any defects has to be checked before buying. Charges are levied almost equal to that of a home appraisal. Maintenance fees, property and utility taxes are to be paid along with insurance and closing cost. Moving cost depends on number of goods and distance.
In case, you are purchasing home for the first time, it is great if you choose second hand furniture. Repairs are mandatory, so it is the purchaser duty to shell out the money from his pocket and replace with the new one or repair the same.
- Tax benefits
- Can selling it out for rent
- Interior decoration
- If the value of the property declines, it leads to financial loss while renting.
Renting a house
Renting a house is comparatively smarter choice, because it is cost effective than buying a house. But there are several costs that you may need to bear.
Owners request the tenants to pay the security deposit which can be used if any damage or repair occurs. It is known as security deposit which is returned to the renters at time of vacating the house.
Rental payment and insurance
Prior to moving in, you need to pay the monthly rent, it may vary if you move in between the month. The moving cost depends on number of goods and distance you travel to shift which is similar to moving cost of buying a house. Renter insurance is not mandatory but it is safe to apply in order to protect the house from burglary and fire.
Owners may provide basic amenities at the time of moving in, if so they are charged along with the monthly rent.
- Can shift and vacate easier
- Credit profiles and points are not strict
- Few utilities to be carried while moving
- No tax benefits
- No equity and housing security
Rental scams take place quite often.
- They are in form of telephonic conversations pretending to be the owner or real estate agent asking you to transfer money.
- Fraudulent scammers copy the content from sites which are on sale to rental site. So investors must be safe.
- Showing the properties which are belonging to government or corporate to renters which have no landlord.
To stay secure and safe, join virtual real estate investing club founded by DC Fawcett where his blogs speak about rental and short scale scams.