Investing in rental property can be a very rewarding experience if done correctly. However, even the most prudent investors have found themselves learning a few new things from the time they started investing in these properties. Here are few things that many people who’ve invested in rental property wish they’d known when they first got into the business.
1. Property taxes change
This is one of the things that can be easily underestimated. Once you get comfortable paying a certain amount in property taxes, you may forget that these taxes rise too as the value of your property increases. These taxes can also change depending on whether the homeowner is using the property as their primary residence or not among other factors. You have to ensure that the rent set will take into account all this.
2. Tenants can cause significant damage
As a landlord, you may be so relieved to have tenants that you forget that at the end of the day, the tenants will leave and the property will still be yours. If you have the wrong kind of tenants, your property can suffer significant damage and if you’re unable to follow this up once the tenant leaves, you may have a huge bill on your hands. Sometimes, even tenants who seem okay at the beginning can cause serious damage near the end of their stay. Ensure that you visit your property regularly to see that things are still in order.
3. Nothing Beats a good tenant
Good tenants are hard to come by and when you find a good one, it’s important that you keep them around for as long as possible. These are the tenants who will pay their rents on time, won’t be a source of disturbance for others, won’t cause damage to the property etc. You can make such tenants more comfortable by ensuring any issues they have are resolved quickly or even not raising their rent during their stay. This may seem expensive but in the long run, they are worth it.
4. Repairs will come up when you least expect
The job of maintaining the rental property in good condition largely falls on the property owner. Not all problems in the house will be because of the tenants. Problems with plumbing, heating and cooling systems and even structural problems can come up. These problems are usually unexpected and can be rather expensive. Ensure you have funds set aside to handle such eventualities.
5. Set the rules and live by them
The job of being a landlord has many challenges because you never quite know what sort of tenant you’ll be getting. If you start off by being too accommodating, some tenants will take advantage of this and this can result in gratuitous misuse of the property, late rent payments etc. Have a set of rules regarding such issues and stick to these rules. If there is a charge for paying the rent late, ensure that it’s enforced. If you’re too faint-hearted, you may not make it as a landlord.