It’s amazing how many beautiful homes are vacant in the Metro cities these days.
Just look at the homes listed for sale and you’ll see hundreds of pictures showing that the owners have moved on.
What most sellers do not know is that their home is vacant every day, their equity drops and no one gets any profit from the home.
However, despite low rentals and risk, it does not make sense for a homeowner to keep the property vacant. “The disadvantages of keeping the property vacant are more than any apparent advantages that it offers. Let checkout problems of keeping home vacant.
No return on capital:
Earlier, property prices would grow every day, and low rental yields would hardly concern homeowners. Besides, most owners will leave the property empty so they could sell it off quickly when they get a good price, without thinking about the challenge of vacating the property.
However, property prices have either stayed stable or have undergone a correction across the nation in the last five years or so. Ad for the next few years, at least, property prices are expected to remain stagnant.
Expenses to be paid:
Even if a property remains vacant, the owner can have to pay multiple costs, such as property tax, fixed charges, and others. If the property happens to be in a gated housing community, then there are fees for society maintenance that need to be charged.
Most of these costs, excluding property tax, are paid by the tenant if a property gets rented out. Bearing in mind that ownership of property comes at a cost, bearing properties empty does not make sense.
Tax on notional rent:
The government imposes a tax on national rentals to prevent taxpayers from keeping their houses empty and also to make properties available to tenants.
Notional rent is the rent that you are presumed to earn from a residential property even if you don’t happen to earn any rent. This rent is taxable as per the Income Tax Act, 1961. This article focuses on the various aspects of notional rent and the applicable tax.
However, from the financial year 2019-20, tax on notional rent only comes into play if you have more than two properties.
The property gets decayed:
“Compared to an inhabited house, a vacant property suffers more from wear and tear. A completely usable and livable property increases the property’s life and maintenance.
Vacant properties are also prone to harm like fire, seepage, electrical damage, and mold damage so on. It’s better to have tenants in your house so that regular maintenance takes place and immediate action is taken.
More vulnerable to theft, squatting, trespassing, and intrusion:
Threats such as theft, vandalism, and other such crimes are faced by abandoned homes. It is possible to steal copper wiring, costly interior or sanitary fittings, and electrical units, iron/metal from windows and doors, or even main gates.
In remote areas, individual cottages often appear to attract intruders committing illegal acts as they hunt for lonely areas in the dead of the night. These homes tend to get vandalized and robbed as well. Vacant buildings are more prone to theft compared to occupy one.
Reasons Why Your Rental Property Might Be Lying Vacant
- Rent Is Too High: If your unit is correctly priced, it will be rented. An overpriced unit may discourage prospective tenants from coming to see the property at all or may believe there are cheaper, comparable apartments on the market for new tenants who have seen it.
- Location: You may be having trouble finding tenants because of the location of your property. Tenants in the area may value properties that are close to public transportation. Your property could be located on a busy street, which could put off some tenants or it could be remote, in the middle of nowhere, which could also be unattractive.
- Inefficient Marketing: Search Real estate agents they help you in sell or rent your property. Real estate agents work with property buyers or sellers and help them navigate the complex nature of the property market. Agents talk with clients to find out what kind of property they want and what they are willing to sell or pay, and any specific amenities they are seeking. They will help you in marketing your property in the market.
The bottom line is that by renting it out, whether or not there are attractive returns on a house, there are several points that support leasing it out and maintaining its protection as well. For a long period, it is in the best interest of the owner not to leave the property empty.