Numerous individuals consider buying rental property and becoming a landlord. However, before quickly signing loan papers they need to learn about issues with owning and managing rental units.
1. Start-Up Investment Costs
Potential investors typically think of initial costs of investment property as the only cost. They don’t consider remodeling costs, having an expectation of costs ending at the closing table.
Purchasing out-of-date rental property or if repairs are needed, could cost a substantial amount of money making it not rentable. Even with properties in good condition, changes may need to do bringing it to code.
2. Needed Repairs
Owning rental property means making repairs, and needing to pay for them at any given time. There is no warning before most repairs are needed, and oftentimes they’re costly.
3. Handling Tenants Issues
Most tenants pay rent, treat property respectfully, and are kind to neighbors. Unfortunately, there will be tenant issues somewhere down the line which needs handling. Tenants fighting, damage was done to the property, and tenants are not paying rent.
4. Rent Collection
Most tenants pay rent with no issue every month, but then there are ones that don’t pay at all. Investors need to be comfortable with collecting rent, or having a property management company take on this responsibility for them.
5. Costly Evictions
The majority of evictions are both time consuming and costly. By the time a tenant is successfully evicted a landlord can incur a significant amount of expenses and lost time.
6. Finance Management
An investors finances are forever changing, learning to manage them is extremely important.
7. Investment Property Safety
There is a chance of being sued if a tenant is injured on a rental property even with homeowners insurance. Keeping this property maintained properly is a landlord’s responsibility to avoid accidents.
8. Tax Payments
Income from investment property needs to be reported on taxes yearly, along with property taxes on each home owned.
An excellent way to make money is by renting properties, just keep in mind hard work is involved.
For more information please contact Real Property Management Las Vegas, or call us today at 702-478-880.
