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What are the Common Property Rental Pitfalls?

Anyone looking to have a roof under their heads has to take into consideration the many factors which might affect their decision as regards property investment.

People who might be living alone might not see the appeal in fully purchasing a home for them, especially if they’re the nomadic type. 

On the other hand, it isn’t far-fetched to say that a popular option among large families is to buy a property because of the stability it offers. Whether you’re looking to rent, or buy a condo in Davao, for example, there are so many things you need to repeatedly ponder over, before finally making your decision. If you’re leaning towards renting a property, then it would be to your advantage to inform yourself first of the potential hazards you might face in this endeavor. 

Instability

For people living alone, there are so many things that make renting a property so appealing. On the other side of the coin, however, there are also so many reasons why renting a property might not be a viable option. One of these reasons has to do with the instability presented by a rental property arrangement. 

Since rental properties are not meant to be permanent arrangements, the renter will be exposed to different unexpected situations that they might not be prepared to handle. For example, a landlord has the freedom to evict the person at any given time of day, provided, there would be a 30-day notice. Even committing just a minor infringement could already be grounds for your eviction. 

A 30-day eviction notice would not be adequate for you to begin looking for a new place to stay. If you have any other commitments, such as work, then such a situation might distract you from doing your job. 

On the other hand, buying a property rather than renting it will offer you more stability, as you won’t have to fear getting kicked out at any time. 

Bounded by a lease 

Renting a property obviously means that you do not take ownership of the company. Someone else has control over changes made to the property, and this might make you feel stifled. Before renting a property, however, it’s understood that you’ll have to sign a lease agreement between you and the landlord. Contained in the lease are several terms and clauses which can define what you can and cannot do to the property. Other information that might be contained in the lease pertains to the scheduling of your rent, as well as, the rules and regulations set forth by the landlord.

Because of these bounds, there is a tendency for you, if you are a renter, to feel stifled by the lease agreement. You can’t just as easily make changes to your unit since you’re only “borrowing” it for an agreed time period. As much as you might want to change miscellaneous features, like wall color, flooring, or lighting fixtures, the terms set forth in the lease won’t allow you to. 

Another disadvantage present in being bound by a lease is you won’t easily be able to resolve such issues in your unit, like plumbing issues. You would first have to inform your landlord of the problem before it can be resolved. 

No equity

Most people, especially those who already have families, will undoubtedly view purchasing a property as a life-long investment. Because property owners are not stifled by any lease agreement, they can do as they wish to their respective properties to potentially increase its value. They could make major renovations to the house, or make some attractive additions, like a garden, or an above-ground pool deck, just to name a few. 

Initially, the purpose of these renovations might be to increase the quality of life of those residing in it or to improve the aesthetic appeal of the property. In the long-term, however, these could be seen as valuable investments, especially since these additions are able to appreciate the value of the property if there are plans to sell it. 

Another situation that might increase the value of the property, is the addition of useful establishments around the area, such as restaurants, banks, or hair salons, to name a few. 

These things are not possible if you’re renting a property. If you’re renting, you won’t have the ability to change aspects of your home, and you won’t also be able to make improvements that can increase the value of your property since you’re bounded by a lease agreement. What can happen instead, is that your landlord might begin demanding an increase in rent if new shops were to open in the area, because of the increase in property value. Such a situation will force you to make changes to your budget, and the way you allocate your expenses. 

Key Takeaway

If you’re looking to rent property, say a condo in Davao for example, it would be in your best interest first, to inform yourself of the disadvantages and advantages present in renting. It is generally widely-held believe that buying a property is the more attractive option when it comes to property investment. But if you’re looking to rent one, out of convenience, then you should make yourself aware of the possible pitfalls of this endeavor. 

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