by Jeff
12. July 2011
Rental homes have been around since forever. If you need a place to stay or move into that needs little start up and ease of access then renting would appeal to you. Renting is the short term or long term lease of a property or place. With rent houses, you pay a weekly repayment that’s dependent on the terms that you and the owner agreed upon. Depending on your contract, your rent may include some benefits but the utilities you use are not included in the repayments meaning you have to pay for what you use. At times, for the initial repayment, the owner may ask for an advance payment that’s 3 times the amount of the weekly repayment.
Renting does have its setbacks one being your investment ventured in a dead end. Renting is okay for the short term path, but for a family that needs a dwelling for the long term, investment in rental homes does not give the security for your family because the property is never yours in the first place. You cannot customize the way it looks to suit your preference giving you the feel that you don’t have a choice. When considering a place to move into, narrowing down your choices is always a must. Check on your options, and carefully consider the pros and cons of it. Renting should perhaps on the bottom of your list.
In a typical rent setup, you start off by putting down a deposit that may usually be refunded or applied to your repayment after a certain period of time. The deposit amount may be proportional or on a said percentage depending on several factors that the owner may base it from. Repayments are then calculated based on the market value of the property or by a standard rental fee if owned by someone who manages several properties. Aside from this, landlord or owner does not ask of any other fee; however you cannot have equity on rental homes.
Knowing this side of rental homes tends to discourage the prospect tenant or customer, however there’s actually a program called “rent to buy” to make things worthwhile. With this option, tenants become future buyers knowing that they may purchase the property in a years’ time once they have enough funds toward a dwelling of their own. This option involves renting and saving a portion of the repayment toward the principal price of the property. A part of the deposit will also be applied toward the principal price of the house; making your investment worthwhile the longer you rent in the property. When the time comes for the actual purchase, the price will be substantially lower due to the application of the repayments and deposit.
Short term wise, rental homes provide tenants with flexible means for housing and ease of availability making it a good choice. But for longer term purposes especially for those with big families it would be wise to check out other options such as rent to own that would be similar to renting but provides you with a worthwhile return for your money.