Surprises are rarely a good thing in the single-family rentals industry, especially if the surprise is an unexpected cost or expense. Nobody welcomes that at all. Unwelcome surprises are what may await the new real estate investor in North Logan. But, having knowledge of the most common hidden expenses will allow rental property investors to be more prepared for when these unwelcome surprises come.
Every single-family rental owner needs a good quality landlord liability insurance policy. However, that doesn’t mean that the policy must be the most expensive one you can find. The policy rates of insurance companies can vary widely, as can their quality and reputation. This makes it important to shop around before choosing your landlord insurance policy and to check your rate annually for changes. You should be careful comparing rates and insurance carriers, otherwise, you may end up paying far more than you need for your landlord insurance.
One thing to consider is that a property’s utility bill may also come as a surprise. An energy-efficient property is one that has relatively low energy costs. Something that new investors are going to find out is that a high energy price tag comes with a new investment property. Though the reasons for this vary, property owners have several options to make their rental property more energy efficient. To get a better idea of where the issues may lie, you can have the house checked for air leaks, aging appliances, and other energy “vampires”. Replacing weather-stripping, single-pane windows, lightbulbs, and other leaky spots can go a long way toward lower energy costs. With a few simple fixes and some annual maintenance, you can significantly reduce your rental home’s energy bills.
Erosion Prevention and Repair
New owners of a rental property will discover that each season can bring surprises of its own. Warm spring weather sometimes reveals erosion issues that were not visible during colder months. As such, the cost of erosion prevention and repair may come as an unwelcome surprise. As soil is eroded from a home’s foundation, water can pool and result in damage. Making sure that your rental home has proper drainage and has been thoroughly checked for signs of soil erosion allows you to avoid any unknown prevention and repair costs.
Even the best single-family property owners may eventually face unexpected legal fees. Working with tenants is rarely easy, and disagreements can and do happen. It is a good thing to set aside a budget for any future lawsuits, but it’s an even better thing to prevent a lawsuit in the first place. Performing regular maintenance on the property and responding promptly to repair requests is a good starting point. Furthermore, ensuring your property is compliant with safety standards, giving basic safety equipment, and has been checked for hidden problems like mold, lead paint, or asbestos are a few of the many ways one can steer clear of the courtroom. Following your lease agreement, and encouraging your tenant to do the same, is one method to avoid tenant lawsuits and keep legal fees at bay.
Inadvertent Appliance Damage
Lastly, one more expenditure that may catch a new rental property owner off guard is how quickly appliances seem to wear out. The cost of replacing major appliances every few years can have any investor feeling sticker shock. Lacking the appropriate knowledge of handling appliances can very well lead to accidentally damaging them. That’s where the trouble comes from, not necessarily that the tenants are abusing them. An excellent method to keep your rental home’s appliances running longer and better is to educate your tenants on proper appliance use and care. Aside from using the appliances correctly, performing a few basic maintenance tasks will significantly extend the life of your appliances. For the benefit of both parties, encourage your tenants to take these two simple steps to heart.
There are a number of unpredictable expenses attached to the opportunity of owning single-family rental properties. Knowing this can lead you to be better prepared to reduce or avoid them. Though rewarding, investing in property also comes with its own set of challenges. However, by being proactive with tenant education, property maintenance, and cost comparisons, you can better prevent several unwelcome surprises.
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