The Pros and Cons of Long Term Rentals

 

Long terms rentals guarantee to the landlords a steady income for the months and even years to come. This means that landlords who invest in long term rentals have the peace of mind that they will be generating steady revenue for a long period of time. The downside of long term rentals is that the rental market tends to fluctuate from time to time. This means that the initial rent fee which at signing the tenancy agreement covers all the related household expenses can quickly depreciate in value and start generating a negative cash flow. For example if the current rent fee in the area is £1000 and a property is rented for that fee the landlord will receive this amount for the duration of the tenancy agreement. This means that the he could hardly change the rent fee despite the fact the market value of such rental services for similar property have increased drastically lately.

 

Long term rentals generate steady income but they also incur constant expenses. The longer a tenant stays in a rental unit the more maintenance expenses a landlord will have to bear. Another expense that a landlord must cover for during a long term tenancy is the charge for numerous interim inventory reports written by a professional inventory clerk from London. This report can be scheduled upon a request of the landlord, when he wants to see the condition of his property and how the tenants maintain it. 

As you can see long term rental agreement can have heavy expenses which at a certain point may not be covered by the revenue that the unit generates through rent due to the fact that the economics have changed.

 

Long term rentals can be a risky investment which does not always guarantee adequate income. On the other hand if everything goes right and the market keeps a steady profile a long term rental deal may bring great profit to any landlord. So here is the time to decide whether you are willing to take a risk, or you will prefer another rental option.