For many people out there today, money problems have become a standard issue. Between people having to work multiple jobs just to get by and downsizing their lifestyle in order to afford the cost of living, it can be rather stressful.
Creating that healthy and robust financial profile is something most people strive for, but isn’t always readily attainable. If you have been stuck in a loop of either just getting by or coming up short each month, then you may be looking into the idea of an investment property.
Investment properties can help you to create solid savings for your retirement, and if you happen to live in the property along with your tenant, it helps to make the monthly expenses much more affordable.
So, while there are plenty of pros for investment properties, becoming a landlord isn’t something anyone should take lightly. There are some basics you should be aware of, which we have outlined below.
Have You Considered All the Costs Associated with Rental Properties?
It’s easy to get caught up in the financial gains of investment properties, but it’s important to remind yourself there are also costs associated with rental properties.
Landlords will traditionally be responsible for maintenance, keeping appliances up-to-date and in good working condition, repair costs, and even an increase in insurance costs.
The increased insurance costs tend to be the most surprising to new landlords. They are higher due to the fact you aren’t the primary occupant in the property. A good tip is to look into cheap landlord insurance so you can at least be sure you’re getting a good deal.
Quotezone can certainly help in your quest to find cheap landlord insurance as it provides you with competitive quotes from top insurance providers. You may be shocked to find out just how much you could be saving.
Are You Prepared to be On-Call 24/7?
Did you also consider the fact that as a landlord, you essentially need to be on-call and available to your tenants 24/7? If anything should go wrong with the property, they will need to contact you. You will be the one that needs to arrange repairs in the middle of the night, not them.
What About Tenant Issues?
Then there is the fact that you can’t guarantee you will end up with ideal tenants that pay the rent on time, respect the property and treat it carefully, don’t create too much noise, and follow any rules you’ve set forth such as a pet-free dwelling.
What would you do if you don’t have a “good” tenant and end up with a problem one? How would that affect you mentally, and do you have the time and energy to devote to the issues it will cause?
How Do You Plan on Setting the Rent?
Finally, there is the rent. This isn’t just some arbitrary number you pull out of the sky, rather it needs to be based on facts, statistics, and rental trends in your neighborhood.
Going in with Eyes Wide Open
An investment property can end up being the soundest financial decision a person can make for their future. At the same time, it does come with its own list of downfalls, so it’s important to at least educate yourself on the full picture.