Are Rental Properties Worth the Investment?

In 2024, is it still worth it to own a rental property? It’s no secret that investing in single-family houses is a great idea. This is the main reason why big businesses have been buying homes like crazy for years: they want to own the housing supply. 

This is another reason why we want people to own their own houses again. It’s time to make things fair and give more people the chance to buy houses and get rich in the long run. So, we’re making renting fun so more people can reach their financial goals in the rental market. 

But in 2024, do you think it’s worth it to own a rental home from the best residential properties in Gurgaon? This will depend on your situation, but this blog will talk about the pros and cons of renting out your home to help you choose. There are also ways to escape or lower some of the risks that come with it.

Pros: 7 good things about having rental property

In 2024, you might want to buy an investment property to rent out. There are many reasons for this. A lot of people see it as a way to get financially stable. Some people use it to get rid of a house they don’t need right now, like when they get a windfall or have to move for work and rent somewhere else. No matter what your reason is, let’s start with the good things about renting out a home to long-term renters.

1. Rentals of single-family homes are a good option with low risk.  

Research says that returns on single-family rents (SFRs) have been almost the same as returns on the stock market but with a lot less instability. Because of this, renting out a home is a good way to build or broaden your investment portfolio.

2. If you own a rented house, you can get tax breaks.

One great thing about renting out your home is that you can remove many of the costs that come with it from your taxes. Aside from these tax tactics, landlords can also use other ones. Talk to your lawyer about what costs are tax-deductible, how to use the home’s depreciation to offset income, and how to delay capital gains. 

3. Rental homes can bring in money without doing anything.

It sounds great to get paid to do nothing, right? You will have positive cash flow and passive income if you can rent out your home for more than it costs to run. 

It depends on a few things how easy it is to make passive cash from your home. To begin, how much wealth do you have in the home, and how strong the renting market is in your area? If you have a lot of wealth in a home that you bought 20 years ago or received, for example, you should be able to easily reach positive cash flow.

If you just bought a house or have a big mortgage with interest rates that are going up, you will need to do more work to see if you can make passive income. 

4. Rental homes can go up in value over time 

Recently, home prices have gone through the roof, and many experts think the market will slow down in 2024. This talk might make you want to sell your house and get some cash. But once you sell, you won’t get any more money from the value going up. There is also no such thing as a “housing market,” so this might not be true for you because of the way things work in your area. A great way to buy time while you watch the housing market and figure out when it’s right to sell in your area is to rent out your house.

5. If you rent out your house, you can go back whenever you want. 

Sometimes you have to leave the place you love when the chance comes up. When you move for work, spend a year or two abroad, or receive a family home, you might not be able to live in the home you own right now. But that doesn’t mean you never will.  

Around 2024, there will still be more “accidental landlords” than not. In other words, people who need to rent out their home quickly. If you need to move but locked in a record-low interest rate, you might decide to stay in your home and keep building wealth instead of selling and competing for a new home in a market with few homes for sale.

If you want to live in the house again someday, renting it to good renters will give you the freedom and time to figure out what you want to do in the long run. 

6. A rental that is liked is a house that is well-kept

People live in their homes. Regular long-term renters will keep the house clean and well-kept if you hire good ones. People living in the house also mean that there is someone there to report any problems, like leaks or storm damage, and to keep renters and thieves from breaking in. 

Even if you can afford to leave your house empty, remember that renting to good people gives you the benefits we’ve already talked about (tax breaks, passive income), plus you have someone taking care of and fixing up your home. 

7. When you rent, you have power over your thing. 

You have a lot more power over homes than most other types of investments, which makes them a unique pick. You decide who will take care of your property and who will live there. Even though you can’t turn someone down because of their past or family size, you can make smart decisions if you screen people well. 

Making smart improvements to your home can also help you get more rental income and get a better return on your investment when it’s time to sell. 

Cons: Five risks of renting out your home, along with tips on how to deal with them 

We’ve talked about some of the good things about renting out your home, but what are the bad things? Being a landlord isn’t always fun, so let’s talk about the bad things that can happen when you own a rental property and how to best lower your risk and responsibility.  

1. The people who live in your house are in charge of it.

Bad renters are something that many first-time owners worry about. When you list your house for rent, the people who already live there can damage it. It’s always possible to get a renter who is a pain and costs you a lot of money. There may be times when you need to kick them out because they broke the lease or did something illegal. 

2. Renters can fall behind on their payments

A new poll from the US Census showed that about 8 million Americans, or 15% of renters, need to catch up on their payments. The same number of landlords also run the chance of losing money or not getting rent from their homes.  

3. It’s hard work to take care of rental properties

A rental home can’t make money without a lot of work going on behind the scenes. Taking on this job could quickly turn into the second job you didn’t want. You should be ready for everything, from advertising to choosing renters, doing checks, and getting calls for emergency repairs while you’re away. 

4. People who rent out their homes may have to pay extra fees

No matter who lives in them, every house has bills that need to be paid for. Things like water heaters and roof tiles can break and mold can grow. Rental houses must meet certain basic standards, such as having hot water and not putting off repairs.

5. A rental home is a lot of money and real estate all in one place.

People think that a single-family home is more safe than other high-performing assets. However, it keeps a lot of money in one type of asset. This might be something you’re okay with. The risk is that real estate isn’t easily sold, so if your finances change, it will take a while before you can make money from selling your house. Also, keep in mind that if you do decide to sell to get cash, there will be fees and capital gains tax to pay. 

So, choose wisely when you invest in the best residential area in Gurgaon.