4 Things About Owning Properties that Will Eventually Affect Your Life

By Ann Hills / 3 years ago

Owning property is one of the best experiences you can have in life. Although it requires a huge chunk of money, the investment is worth taking. As long as you're well-informed about property management, you will enjoy this investment. But even if you are not informed enough, if you have a passion for property owning, you can hire property management companies to help you.

Along with everything you know or have heard about property ownership, there are things you need to keep in mind. Especially those things that could alter your lifestyle.

Here are 4 things about owning properties that will affect your life

1. Income Inflow

Income Inflow

When you think of owning properties like a rental house, the number one focus is making money out of it. Although there are lots of issues concerned owning a property will bring in money in your pockets. The fixed income flowing in will definitely change your lifestyle. The monthly checks flowing in straight into your account will create a good feeling.

For instance; if you owned a rental home priced $1,500 monthly, If everything else goes smoothly, you will have $18,000 in one year. This kind of income will keep flowing in as long as your property exists. It's a huge change of income flow in someone's life, even though we know there are things to consider before having these kinds of checks coming in.

Along with the rent you will be enjoying as a reward, still, that won't be the only source of income from your property. Since you're now in the property industry, all the value addition will over time also add in your income stream. In most places, the population is increasing rapidly. This also affects the demand for property, thus leading to an increase in property value.

One thing to keep in mind is that the value increase differs with the location. In some prime locations, the value rises significantly in a short time. It won't be the same in every location, in some remote areas it may take longer before having a property value addition.

2. Schedule and Routines

Schedule and Routines

If you are smart enough in the property industry, then you understand that sweat equity can add value to your property. As you keep maintaining and upgrading your property, you create more value to it. The issue is that doing this without a significant financial cost will need much of your time and this can affect your normal schedule.

The sweat equity will add the amount of rent you charge, as well as increase the future selling price of the property. However, If your hobby is anywhere linked with home improvement activities, this kind of schedule will best suit you. You can fix the house prior to renting, and when the tenant has left before another one comes in. This will let you charge higher with each tenant as you upgrade.

Apart from working on home improvement projects, you will also need to schedule time with your tenants. You might have some breakdowns that need repair, paperwork to do. It comes a time you will need to find the answer to the common question people ask... what does a property management company do? You will probably need to hire one for your property, especially if you are focused on growth or you don't have enough time and logistical capability to handle this demanding task.

You can decide to operate without a property management company, but only if you're not planning to make a serious business. On the other hand, if you're planning to go a lot further with your property investment business, you will need a management company.

3. Taxes and Insurance Fees

Taxes and Insurance Fees

If you're not yet in the property-owning business, then property taxes and insurance cost are not much of a big deal to you. All that will finally change when you get in the property investment business. The insurance fees, property taxes as well as association fees will come in whether you have rented or not, so long as you own the property.

This will start changing your mindset, and priorities in your expenses, since you understand that these costs will always slice your profits. You need to understand that even before owning the property, especially when you find yourself paying the costs without having a tenant in your house. The reason it will change your lifestyle is the fact that sometimes you need to get into your pockets to pay these costs.

Note that these costs are significant, you will need to pay 25% higher insurance fees for your property than regular house owners. The tax paid is also a significant amount, especially if you're caught without a tenant, this could ruin your budget.

4. Focus and Priorities

Focus and Priorities

Have you ever thought of why most people don't own their own homes? You're right because it takes a huge investment to have one. Do you think this kind of investment needs to be on your priority list? Your answer is probably yes, especially if you know what it takes to put everything together. It is the reason why you will definitely change your normal lifestyle, to put more focus on your property.

The issue with having an immovable property such as a house is that you totally depend on your neighborhood for tenants. Most people pray that the neighborhood doesn't move since this would mean losing you target market. The kind of things the insurance can't handle will always be a threat to you.

What if your tenants don't pay their rents on time? This can happen at the moment when you need to pay out the bills. It's not a guarantee that all your tenants will be able to pay you on time always. Even if you had the best tenants who always pay on time, things can get out of hand at times and they fail to pay on time.

The reasons to shift your focus to your acquired property are many to be mentioned in one article. Unless you can acquire a property management company, things can get really hectic at times. Your lifestyle will have to change and rhyme with this flow, whether you're ready or not.

Owning a property will be a great experience if you're aware of all these factors, and are ready to face them. Remember this; you won't have time and everything it takes to run a successful property business on your own, you need to take advantage of the property management companies, to help you handle things.

About the author

Ann Hills

My name is Ann Hills and I am a food blogger and a yoga teacher. When I was a child, I often got around my mother and watched her cooking in our kitchen. My mom always says to me that: “Kitchen is the heart of any home”. I strongly believe in her saying that’s reason why I prefer spending my money to make my home better than other stuff.

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