Renting out your property is a great way to earn some extra income. If you own a condo and you don’t live there for some purpose or you’re not ready to sell it, you can always rent it out to other people. A condo is a home, generally, a part of a bigger building, that has some shared areas including yards, garages, swimming pools, and gyms. All these places are maintained by the landlord’s assistance, rather than by individual condo owners. All these facilities make condos the best place for young families and other people who don’t want to live in a single house. For people who want to rent out their condos, it's very easy and worthwhile to do so. However, renting out a condo has its pros and cons which you should be aware of.
Pros of Renting Out a Condo
There are some obvious benefits of renting out a condo, including:
•Additional income - Renting out a condo adds extra value to your annual income. If you rent out your condo at the price of $1,500 a month, you can earn $18,000 a year as supplementary revenue.
•Enhanced value over time - We all know that property value increases over time generally, so the longer you own your condominium, the more it will sell for in the future.
•Decreased taxes from expenditure rebates - If you repair or upgrade the condo. In return, you can add that value and reduce the expenditure from your income that will consequently decrease the percentage you owe in taxes.
•Security for the future - The rent you receive every month can be allocated to a retirement or emergency fund that’ll always come in handy in the future.
•Additional income - Renting out a condo adds extra value to your annual income. If you rent out your condo at the price of $1,500 a month, you can earn $18,000 a year as supplementary revenue.
•Enhanced value over time - We all know that property value increases over time generally, so the longer you own your condominium, the more it will sell for in the future.
•Decreased taxes from expenditure rebates - If you repair or upgrade the condo. In return, you can add that value and reduce the expenditure from your income that will consequently decrease the percentage you owe in taxes.
•Security for the future - The rent you receive every month can be allocated to a retirement or emergency fund that’ll always come in handy in the future.
Cons of Renting Out a Condo
Renting out your condo has its downsides. Therefore, before you rent out your condo, beware of potential problems:
•You could earn less than expected - Markets fluctuate, and in that case, if your condo remains empty or rents for insufficient capital, it will negatively influence your revenue.
•It may be hard and expensive to sell your condo later on. - If the market value of your condo in the area drops, you may have a difficult time retrieving your initial investment.
•You could expend a lot on improvements and repairs. - Rentals need continual care, improvements, and occasional repairs. These may take up both your time and money.
•You could be responsible for dealing with difficult tenants. - As a condo owner, you are responsible for dealing with late payments or condo damages.
•You could earn less than expected - Markets fluctuate, and in that case, if your condo remains empty or rents for insufficient capital, it will negatively influence your revenue.
•It may be hard and expensive to sell your condo later on. - If the market value of your condo in the area drops, you may have a difficult time retrieving your initial investment.
•You could expend a lot on improvements and repairs. - Rentals need continual care, improvements, and occasional repairs. These may take up both your time and money.
•You could be responsible for dealing with difficult tenants. - As a condo owner, you are responsible for dealing with late payments or condo damages.
Important Aspects To Know
Renting out a condo that you own isn’t an easy decision. Even when you know you can rent out your condo, you need to be careful about a few things. Before you do so, you should skim through your condo association’s governing documents and Understand your condo association’s restrictions. You should also determine how much you should charge for rent, be sure that your renter is clear on HOA rules, and verify with your insurance provider what coverage you require while your condo is being rented out. Once you’ve conducted due diligence from your end, you can safely rent your condo out. It’s an added responsibility and you’ll need to be mindful of who you're renting it out. But as long as you make an informed decision, you’ll reap the benefits of your rented property for years to come.