You may think that rental property is pretty straightforward. You just have to pay the mortgage and other fees like taxes or property maintenance and you can just take the rest of the profits to the bank and pay absolutely no other rental costs.
What you may not realize is that there’s a lot of hidden costs of renting a house out are some that you may not have considered when you have decided to take on this adventure.
Let us take a look at some of these hidden costs and what you can do to minimize these costs.
So what costs are involved in renting a house?
The biggest money sink is hiring people that are not very trustworthy. This includes property managers, contractors, attorneys and real estate agents. Otherwise the costs of renting a house out will increase. It is important that you hire honest and trustworthy people to worth with because you will need long-term relationships in this industry if you are ever going to find any success. You will want to work with people who are not just affordable but that also offer high quality work. There are a lot of unscrupulous people that are trying to take your money rather than help you to grow your investment property into something that increases your income.
Another big costs of renting a house outcomes from not doing your research before you purchase a property.
You want to ensure that high ticket items like the roof or furnace are relatively new and have at least around 15 years left in them before you need to replace them. These can lead to very costly repairs down the line if you are not prepared for them. You do not want a property that is going to make you go way over budget in order to repair because ultimately this will hold you back from making the most income from this property. If you are purchasing a property that has been left vacant for nearly a year, you should consider replacing the electrical work, plumbing, and the water heater and then check what costs are involved in renting a house.
Lastly, you are going to find that bad tenants are going to hurt your bottom line and can potentially increase the costs of renting a house out. You cannot be too desperate to bring in tenants that you have not done a thorough check on before handing them the lease, here at Bolld, we see to it that we screen the tenants effectively, so we can place the right tenant to the most appropriate property suited to them. Failure to do a background check and a credit check could end up being one of the biggest mistakes that you make. You may end up with a tenant that will destroy your property, not pay rent, or cause many other difficulties for you. Through these types of checks, you will also notice if a person has had a history of being evicted, which means that you should definitely avoid renting to this tenant, so make sure you do a tenant screening process.
This is how we screen tenants:
As a landlord, it is important for you to do whatever it can in order to maximize your profits and not letting costs of renting a house out eat up your income.
The only way that you can really accomplish this goal is by avoiding these hidden rental costs. Now that you know what you should be watching out for, you can make more informed decisions that are going to positively impact your rental income. Keep these in mind when you are searching for property or tenants to rent out the property.
Have you developed a process to streamline all these concerns? Is this something that you need help with because you don’t have much time to deal with these things?
Everything you are doing before, during and even after tenancy should be carefully planned out incorporated with a well-thought process to avoid any hassle or damages in the future.
From marketing your property, tenant placement and during the whole duration of the contract is what we, the Bolld Real Estate Management, do.
If you need help let us know and talk to us, I’d be happy to give you a free consultation.