The idea of rental property is alluring in some contexts. This purchase is commonly regarded as a safe secondary income source. But, despite some beneficial sides of it, there are some negative aspects to it.
Pros
Tax benefits
The internal revenue service can allow you to pay less in tax if you are an owner of a rental property. It provides the benefit of deducting the tax from the insurance of the property. In addition, it is also possible to decrease the insurance. Deprecation is another way to reduce expenses. If the owner is a flow-through entity and operates the house in a limited liability manner, the tax can be reduced more.
Seasonal rental
If you rent your property seasonally it can benefit you even more. For many businesses, renting properties seasonally is beneficial. For peak time, you can charge more for the property than usual.
Cons
Lack of liquidity
Rental real estate usually doesn’t sell easily, which makes it harder for those people who need money. In times of emergency, you might not be able to talk to agents as it will need much time to process. Even if you manage to sell the property on time, there is a great possibility of selling the house for less money.
Difficult tenants
Being an owner of rental property comes with the risk of dealing with problematic renters. From making issues to not paying rent on time, tenants can make it difficult to deal with. Misuse of occupancy rules, pets, smoking, and nuances, nothing is off-limits when it comes to dealing with tenants.