home investment

Advantages and Disadvantages of House Investing

Plus minus home investment of course must be known to you who intend to invest by buying a home tread for rent. Yes, renting a house is a property investment that most people do, because it is considered quite easy.

However, do not glare with the potential benefits only. The reason, renting a house in addition to have a high profit potential also has a risk of loss that must be considered. For that, consider the following bonus plus home investment investment.

Advantages home investment

Renting houses have high demand, especially in developing areas, such as areas adjacent to toll access, trade centers, shopping malls, major road junctions, terminals, and others.

  • You can also choose a house near large housing. Usually around the location will create demand for shopping centers, education, and health services-which will trigger demand for rental homes.
  • On the other hand, capital gains can be obtained in the long run (more than five years). Typically, the capital gain of rented homes is on average higher than vacant land. The reason, rental homes have direct benefits, unlike empty land that only has indirect benefits.
  • If after five years the investor decides not to sell it, the house should be rented out. Usually the rental price per year (return) ranges from 5% of the price of the house.
  • A year later, if the economy is stable, rental rates can be raised by 10% – 15%, depending on the environmental conditions of the house. If in the area not many houses are empty, then the increase in rental value can reach 15%.

Disadvantages of home investment

  • One of the shortcomings of a rental home investment is a relatively short tenor, which is only one to two years, depending on the conditions and location of the house and who the tenants are. If the tenant is an expatriate, the house will usually be rented for a longer period of time, between two and five years.
  • Homeowners should also really choose a good tenant. Often happens rented houses quickly damaged when leased to less responsible tenants. Generally it is because the tenants feel the house is not hers, so they are less maintain the condition and quality of home building.

That’s a glimpse of the guide around information plus minus home investment.