Wondering about the benefits of owner-occupied rental properties? Well, for one thing, such properties have shared responsibilities and the burden of costs is shouldered by both the owner and the tenant. While these types of rental properties can be a great starting point for homeowners to generate monthly profits, tenants, too, can cut down their rental expenses by opting for it. Owing to this and some other advantages, let’s discuss a few lesser-known benefits of owner-occupied rental properties in Pakistan!
Here are Some Benefits of Owner-Occupied Rental Properties in Pakistan
There are some distinct benefits of owner-occupied rental properties in Pakistan. Not only can the owners utilise the rental income to pay off their debts, mortgages, premiums, and monthly expenses, there are various advantages ranging from depreciation expenses to tax savings associated with living in the same property you put up for rent.
In order to give you a better overview, here are some unknown benefits of owner-occupied rental properties in Pakistan:
- Shared Costs and Expenses
- Easy Management and Maintenance
- Depreciation Expenses
- High-Quality Tenants
Shared Costs and Expenses
There are several reasons for tenants to move out of a rental property, out of which rising expenses and rent charges are the most common ones. Besides, utility bills and other property expenses that even though occur once in a while, are usually bothersome for tenants. Property owners, however, have to face the same expenses, along with property taxes and additional repair and maintenance costs. So, living in the same property you rent can save both landlords and tenants from bearing these expenses alone since the cost is broken down into two or more shares – depending on the number of tenants and the rental property.
Easy Management and Maintenance
Easy management and low maintenance costs are, hands-down, two of the biggest benefits of owner-occupied rental properties. For landlords, it minimises the efforts that go into property management along with decreasing the overall maintenance cost that eats away a significant percentage from their monthly profit. For tenants, the costs and efforts get divided, and they do not have to worry about the leaking sink or the dripping ceiling all by themselves.
Moreover, it goes without saying that when homeowners live in their property, they usually do not need another hand to manage their property affairs. They can manage and administer every issue at their end without any hassles.
Depreciation Expenses
Generally speaking, depreciation is an expense that no homeowner is happy about. Not only does it take a toll on your pocket in terms of taxes, but it also decreases the overall worth of your asset. All fixed assets, including buildings and homes, are prone to depreciate over time. Further, depreciation on rental properties allows you to write off the depreciation only on the portions of the property that are occupied by tenants. This could result in extra tax savings per year. Not just depreciation expenses, owners who put their properties up for rent are allowed to write-off their rental expenses against their rental income. So, it is only natural that any cost applied to rental properties can be used as a tax advantage.
High-Quality Tenants
Most tenants are extremely particular about who they want to have as neighbours and who they want to avoid living next to. While it is easier for landlords to know about tenants by conducting a rental interview, it gets difficult for tenants to know about the neighbourhood and the property owner. For instance, landlords can state their property rules upfront if they do not wish to have a pet on their property, or they do not give properties to families with young and noisy kids. Tenants, however, have a tougher time in exploring what they are signing themselves into. In this regard, an owner-occupied building is reassuring since owners can give a brief of all the neighbours and tenants can have a broader idea about the landlord’s lifestyle, too.
While there are many benefits of owner-occupied rental properties, one of the major drawbacks of this type of rental property is that many people do not like the idea of living in the same building or unit with their landlord. So, even if the tenancy pool is of high quality, the range is limited. Landlords can easily resolve this issue by networking with different agents using Zameen’s property portal. Another great way of networking is to connect with nationwide real estate experts and investors on online forums like Zameen Forum.
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