With some exceptions, residential real estate is usually a smart and profitable investment opportunity. Those who can purchase more than one residential property are typically at a distinct economic advantage. They can collect rental income that may cover their entire mortgage payment, all while building equity. There are, however, a few potential disadvantages.
Rental Payment Default
There are a variety of reasons why tenants can default on their rental payment, some of which include:
- Serious illness
Fortunately, renters insurance for landlords may cover the loss for these kinds of circumstances. More information about this kind of coverage can be found at https://www.rentrescue.com.
Property damage is always a large concern for homeowners. Tenants don’t always take great care of their rentals and can cause a lot of damage. Not reporting water leaks can lead to very expensive repairs. Some people add property guidelines to leases to ensure that basic maintenance is upheld and that they’re informed when there are substantial problems.
Landlords always run the risk of having to pursue legal action if problems arise with their tenants. Some potential legal matters can include tenants who refuse to leave the property, tenants who conduct illegal business inside the home or tenants who refuse to pay utility bills.