There are a number of reasons why buying a property to rent out is a smart investment. Financially, it makes a lot of sense. But have you considered the headaches involved in dealing with tenants, chasing down rent checks, and maintaining the property? It’s a full time job, and if you’re already occupied with other modes of income, you’ll soon be swamped with the day-to-day management of your rental property. In other words, being a landlord is a tough gig. Here are some of the common issues that you’ll come across when purchasing a rental property.
Raising the capital. Many people looking to buy a rental property think that the startup capital should just cover the amount to secure the purchase of the property. But this couldn’t be further from the truth. Your startup capital should include not only the purchasing cost, but also the refurbishment costs and the logistical costs to turn your property into a rental property. Turning a tired home into a fresh rental property can be expensive, so be sure to do as much as you can by yourself without cutting too many corners. There are a number of landlord and tenants laws in place, which you’ll have to consider when refurbishing your rental property – things like handrails along the front and back entryways, secure reinforced steel doorways, peepholes, deadbolt entry installed on front and back doors, firewall installation where necessary as well as a complete coded inspection.
Ongoing repairs. Once the place is occupied by an ideal tenant, there will inevitably be breakages and wear and tear will occur. Keeping on top of the maintenance of the property is one of the most costly ongoing expenses you’ll have to keep in mind. Water heater malfunction is a common problem that can occur seemingly out of nowhere and can cost upward of a thousand dollars. These problems can occur at all hours of the morning without any prior warning. So, you better be prepared for a late night call from a tenant from time to time.
Collecting rent. One of the biggest headaches you’ll have to face as a landlord is collecting rent on a monthly basis. From time to time you’ll have a bad tenant that simply won’t pay the rent. In this case you’ll need to send round a bill collector. Consider getting yourself a property manager such as Revid Property Management who can take care of all of these day-to-day issues for you – for a reasonable price. It’s worth taking all that pressure off yourself and letting a professional handle the situation, especially if it comes to evictions and legal proceedings. Understanding your rights as a landlord as well as the tenant’s rights is imperative to managing a successful rental property.
Be smart with your budget. Like any business or investment, sometimes it’s feast and sometimes it’s famine. The same applies to owning a rental property. Tenants will come and tenants will go. Sometimes you’ll be left with a vacant property and sometimes tenants simply won’t pay the rent on time, so you’ll want to budget for these kinds of occurrences.