Irvine Real Estate Link, CA – Renting out your property – pros and cons

by Robert Mack on August 20, 2008

in Irvine Real Estate

Your personal character plays an integral part in renting out your Irvine property to total strangers. You have no idea who the tenants are, therefore you take a risk. To minimize this risk, you have their credits, places of employment and monthly incomes checked, and perhaps interview them personally in order to build an impression, a feeling, if you will. To further minimize this risk, you ask for the first month’s rent as deposit, to be paid back in whole or in part depending on the final condition of the property as they vacate it. Tenants can be courteous and understanding; some may be a pain, and if you don’t have the personal character to deal with troublesome ones, then you shouldn’t consider renting out. When you rent out a property it becomes an investment property. You cannot always expect ideal conditions. You must be prepared for headaches, which come with the territory. Fortunately renting in Irvine, compared with other areas, seems to attract more desirables than otherwise.

The Mack Team does leasing as well as selling and buying properties for clients. I am happy to say that all the clients we have helped lease so far we have not yet heard a complaint. In fact in two occasions, we have received letters of complements in selecting the right tenants. I don’t want to sound over-confident because, given time, we are more likely to come face to face with an undesirable one. We have learned—and are still learning—from the past experiences of other agents who normally tend to concentrate on couples, or couples with children, or couples that are brothers and sisters or friends, rather than a single person. There is nothing wrong to lease your property to a single person, as far as we are concerned, but some of our colleagues in the profession believe singles carry more risks than couples. I am yet to digest this latter statement.

But no matter what, over time, renting is one of the best ways to increase your monthly cash flow. And also, over time, the advantages overweigh the disadvantages, but remember; you must have the character to deal with undesirable situations. If you don’t have the character and still want to be a landlord or a landlady, I’d suggest you hire an experienced property manager to handle problems, repairs and complaints. It may cost you a penny or two, though.

Advantages

– It pays, or mostly pays, your mortgage on the property. This is a huge advantage, and this alone may offset several disadvantages

– Tax breaks in the form of claiming depreciation, repair costs, maintenance, etc. (consult your accountant for details)

– In a long run, property appreciates annually, thereby increasing your equity as it sits and generates funds on both fronts.

Drawbacks

– Dealing with incessant tenant complaints

– Late payments
- Delinquent tenants

– Property damage

– Noisy tenants and complaints from the neighbors

– Without permission, boarding other ‘tenants’ and over-crowding the premises.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team

Robert & Tania Mack

Century21 Professionals

Irvine, Orange County

http://www.irvinerealestatelink.com

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