Rarely are surprised positive in the realm of single-family rentals. This is particularly true when the surprises involve unanticipated prices or expenses. These unfortunate surprises are virtually unavoidable for new investment in Stockbridge. Rental property investors may be better prepared when one or more surprises arise by becoming aware of some of the most prevalent hidden costs.
Landlord Insurance
A reliable landlord liability insurance policy is essential for every single-family rental owner. This does not imply that you must purchase the most expensive coverage you can. Insurance policy rates can widely vary, and so can the quality and reputation of the insurance provider. Because of this, it’s crucial to compare options before selecting a landlord insurance policy and to check your rate each year for adjustments. You can end up spending far more on landlord insurance than necessary if you don’t thoroughly evaluate rates and insurance carriers.
Energy Costs
The property’s utility bills may provide a second unpleasant surprise. The cost of energy is generally minimal for an energy-efficient building. But prospective investors may realize that their new investment property comes with a high energy bill. There are many things property owners may do to increase the energy efficiency of their rental property, regardless of the underlying causes. Having your home inspected for air leaks, outdated appliances, and other energy “vampires” can help you identify potential problem areas. Lowering energy expenditures can be achieved in large part by replacing weatherstripping, single-pane windows, lightbulbs, and other leaky areas. With a few easy improvements and yearly upkeep, you can drastically lower your rental home’s energy costs.
Inadvertent Appliance Damage
How rapidly appliances tend to wear out is another unplanned expense that could startle a real estate investor or Stockbridge property manager. Any investor can feel stuck due to the expense of updating big equipment every few years. The issue is not necessarily that tenants are mistreating the appliances, but rather that they lack knowledge on their correct use and maintenance. One of the most effective strategies to keep the appliances in your rental house functioning longer and more efficiently is to educate your tenants on appropriate appliance use and upkeep. You may dramatically increase the life of the appliances on your property by encouraging appropriate appliance use and having them carry out some simple maintenance procedures.
Pest Control
First-time investors may intend for their tenants to keep unpleasant pests to a minimum through routine cleaning and maintenance. Renters may still experience insect issues in even the cleanest properties, including termites, ants, rodents, and more. As mandated by local law, you might need to offer pest control services occasionally to keep your property livable. Not only should you be prepared with a local pest control company that has been thoroughly vetted, but you should also budget for such services in advance. Otherwise, emergency termites or other treatments can result in negative monthly cash flows.
Erosion Prevention and Repair
In the first year of owning a rental property, each season might bring its own unique challenges. Occasionally, warm spring weather reveals erosion problems that were not apparent during the winter. In such circumstances, the cost of erosion prevention and maintenance may deter an investor and alarm the tenants. Water can accumulate and cause harm as soil erodes from a home’s foundation. The easiest method to minimize unanticipated preventive and repair expenditures is to ensure that your rental property has adequate drainage and has been thoroughly inspected for symptoms of soil erosion.
Tenant Lawsuits
Even the most careful single-family property owners periodically encounter unforeseen legal costs. It can be challenging to work with tenants, and arguments can occasionally arise. It may be wise to set aside money in case a lawsuit arises in the future, but it would be wiser to take all reasonable steps to avoid one in the first place. One of the greatest places to start is by doing regular maintenance on the property and swiftly attending to repair requests. In addition, ensuring that your facility complies with safety requirements, providing basic safety equipment, and inspecting for hidden issues such as mold, lead paint, and asbestos are all strategies to avoid litigation. Honoring your rental agreement and encouraging your tenant to do the same, is another good way to avoid getting sued and paying huge legal fees.
In Conclusion
You can be better prepared to avoid or reduce unexpected costs that go along with owning single-family rental properties, now that you know about them. A good deal of unexpected outcomes which come with real estate investing can be prevented if you are active toward tenant education, property upkeep, and cost comparisons.
Real Property Management Anchor is a veteran expert when it comes to property management, making us the greatest resource for new and inexperienced property investors. Contact us today to see what we can do for you and your property!
Originally published on January 17, 2020.
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