Owning an investment property can be a rewarding experience, but it comes with its fair share of challenges. From finding the right tenants to maintaining the property, a lot goes into being a successful landlord.
This blog post will take a look at some things you can expect when maintaining an investment property. There are also tips on preparing for each one so that you can keep your property in tip-top shape.
Unexpected Expenses
No matter how well you budget or how often you inspect your property, there will always be unexpected expenses that pop up from time to time. These unexpected repairs can quickly eat into your profits, whether it’s a broken window or a clogged sink.
That’s why it’s crucial to have an emergency fund set aside expressly for unexpected repairs. This way, when something goes wrong, you’ll have the money you need to fix it without dipping into your other rental income.
If you’re having trouble saving up for an emergency fund, consider increasing your rent slightly. This extra income can go towards your emergency fund, ensuring that you’re prepared for whatever comes your way.
In addition to setting aside money for repairs, you should also budget for regular maintenance like HVAC tune-ups and pest control. By staying on top of routine maintenance, you can avoid more serious (and expensive) problems down the road.
Property Damage
Whether it’s intentional damage from rowdy tenants or accidental damage from wear and tear, property damage is something all landlords have to deal with at some point or another. Thankfully, there are several things you can do to protect your property from damage.
First, ensure your lease agreement contains clauses requiring tenants to reimburse you for any damage they cause (beyond normal wear and tear, of course). You should also carry sufficient insurance coverage in case of major accidents or disasters. Finally, regular preventative maintenance will help catch any potential problems before they have a chance to do severe damage.
If the damage is ultimately caused by natural occurrences, ensure you’re in contact with reliable flood cleanup and restoration experts who could help you out. It might cost you money in the short term, but it will save you a lot of headaches (and money) in the long run.
Difficult Tenants
Even if you screen your tenants thoroughly, there’s always a chance that you’ll end up with a problematic tenant at some point. From late rent payments to disruptive behavior, dealing with difficult tenants can be a headache.
The best way to deal with difficult tenants is to be proactive from the start. Establish clear rules and expectations in your lease agreement so that everyone is on the same page from day one. You should also frequently communicate with your tenants and document everything in case you need to take legal action down the road.
If it’s really not working out, don’t be afraid to evict a tenant. It’s a challenging process, but it’s often the best way to protect your investment property. Remember, your tenants are not the only ones who have rights–you do too!
Vacancies
You’ll inevitably have vacancy periods at some point, especially if you own multiple properties. While vacancies are unavoidable, you can do plenty of things to minimize them.
One of the best ways to reduce vacancy is by offering incentives to lure in new tenants. This could include offering discounted rent for the first few months or throwing in a free month of rent after six months of the tenancy. You could also provide move-in bonuses like free parking or waived pet fees. Whatever incentive you choose, make sure it’s something that will appeal to your target tenant demographic.
Another way to reduce vacancy is maintaining a good relationship with current tenants. If they’re happy living on your property, they’re more likely to renew their lease when it’s up. Offer them renewals early, so they have time to make other plans if they’re not interested.
Lastly, keep your finger on the pulse of the rental market. If you know rents are going up in the area, raise your prices accordingly. You don’t want to price yourself out of the market, but you also want to ensure you get all the money on the table.
Maintaining an investment property is no easy feat — but it can be done with proper planning and preparation. By being aware of the challenges you may face and taking steps to mitigate them ahead of time, you can help ensure that your investment property is well-maintained and profitable for years to come.
