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Consider these before buying property for rental income

1 Comment Sub Category:Delhi-NCR,Realty News Posted On: Jan 04, 2013

buy-houseNew Delhi- As a buyer it is always better to think of the various aspect before investing in any sort of property be it for rental income or for residing purpose.

Not many of us think  about the imbalance of the costs incurred in the long run  while investing in a property for rental income. The most important things to consider and ponder over before investing in any property are the cost of the property, interest rate, tenure, home loan and the rental income.

Many of us compare the cost of the property over the rental income, the interest rate and the tenure period for the coming years and perhaps fail to see the costs incurred in between the period.

However, a person investing in a property for rental income can recover the cost earlier based on whether one  has taken a home loan or not. Likewise a person with a home loan for 19 years can accumulate the rent along with the interest to recover the cost of the  house and a person without a home loan for 14 years can accumulate the rent along with the interest to recover the cost of the home. The difference here is the  amount of time taken for both to recover the house cost.

Be aware of the cumulative costs of the house annually which includes the cumulative EMIs, the outstanding principal, the opportunity cost of down payment and the maintenance expenses.

Also the rental yield is a main aspect impacting the changes in the capital values as per the locality and vice versa. Consider the pros and cons of  buying a property for rental income as there are  many advantages as well as disadvantages.

Features on how and where to buy a property for rental income should also be considered. One should always buy a property for rental income in a high-growth area with a potential for capital gain. The tenants should be appealed through an easy access of schools, colleges, hospitals and others. A complete research on the prevailing prices can help a buyer to figure out the amount about the property payment  in the particular area.

Other factors like the property features, parking space, attraction of innumerable  rental market segments and low maintenance property costs should be considered.

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