Tuesday, November 11, 2014

The Pros And Cons of Real Estate Investing

It's been a while since I made my last post on one of my favorite subjects in this blog, "real estate investing".  I think, it's just timely to make another one as my third bad experience as a real estate investor was just experienced last month when my tenant left my house without paying a month's rental and get away with 3 months unsettled electric and water bills. Guess what? These unpaid debts had caused my house's electric and water supplies to be cut off and this had really given me a big head ache considering that I just experienced a great financial blow as my mother who was living with me and under my care was hospitalized and died on the same month.

This experience had compelled me to make another post on the pros and cons of real estate investing. While it is a fact that such unfavorable experiences are more likely to appear in this kind of business, having yourselves prepared in dealing with troublesome tenants will also do the trick.  In my case, my property is being rented out for Php10K a month and the total debts incurred by my tenant on electric and water bills amounted to about Php11K.  They left my property without due notice mid of the month so technically, they have just stayed on my house unpaid for half a month.  I made them sign a contract prior to occupying my property and have them paid 2 months deposit for a total of Php20K.  Apart from the disturbance they have created and being a nuisance, technically, they don't really owe me anything because of the Php20K deposit I have secured from them.  On top of that, I was able to confiscate 1 A/C unit in good working condition and some not so expensive sets of monobloc chairs intentionally left in the house. 

What I have cited above is a perfect example of cons in real estate business which can be resolved by properly screening your tenants and being well versed in property management and maintenance. The pros of real estate investing from my personal opinion still outshine that of it's cons.  There are 3 ways of making money from real estate such as leveraging property investment, renting out the property and the last and by far the most common one is selling the property for a profit. The fact that more and more property listings sites are coming out on the world wide web, proves only one thing, that real estate is still one of the most commonly sought after investment that has a huge potential to be a money making asset.

Real estate investment just like any other investments has pros and cons, the thing is, you have to know exactly what you're going into.  While real estate investment can give you the financial freedom that you so deserved, it is also inevitable that you are willing to learn and focus and achieve your goal through patience and hard work.  I have never regretted investing my hard earned money on real estate but I'm not saying that this is the surest way to success, as every investment requires a great deal of discipline and sheer determination to succeed.

If you want to learn more about real estate investing, you can check out these articles I found: Philippine Real Estate Buyers Guide and How to Make Money from Real Estate

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