Having a rental property provides an extra source of income, but managing your own rental property can mean extra headaches if you’re not prepared for handling your investment!
Managing your own rental property certainly comes with unforeseen challenges and costs. The following are some expenses you might not have anticipated as a landlord of your own income property.
Knowing when to seek legal help is an important part of being a landlord. An experienced attorney can provide you with advice regarding your tenants and your property in the event that you’re about to evict a tenant or if you’re being sued.
Of course, legal advice isn’t always free, but having a trusted attorney by your side can help you make the best decisions and avoid potential legal conflict—and therefore further legal fees—that may be associated with managing your investment property.
Bad tenants can cause major damage to your property as well as to your finances. Having disgruntled tenants is one of the major reasons for unforeseen costs when it comes to having a rental property.
These tenants can make demands, file a lawsuit, cause physical damage to your property, leave bad reviews, and cause your property to have high vacancy rates. Having bad tenants in your rental property is one of the biggest challenges and unforeseen expenses for landlords. File denial of service claims with local housing offices.
The administrative costs of managing your own rental property are often more extensive than many property managers expect.
Interviewing tenants takes time and money. You’ll need to check their credit history, follow up with references, conduct property inspections, and continue to collect the rent every month, among many other tasks.
Without having an established system in place to handle these things, you’ll spend more of your own time and money trying to find good tenants and manage your property than you think. Also have to consider all of the financial Accounting aspects of managing the costs and reporting the expenses and income to State and Federal tax authorities.
Of course, any good landlord expects to spend some of their income money on maintenance of the property.
What many inexperienced landlords don’t take into account is the real costs and effort of keeping their property in good condition at all times. From problems with the roof to the plumbing, HVAC, and electrical, unexpected maintenance costs can quickly add up.
Add this to regular maintenance costs—such as wear and tear of the property, changing air filters, and handling tenant complaints—and you’ve got more maintenance costs than you think. Vendors often take advantage of Landlords.
No one wants their investment property to be empty, because this means you’ll still have all the expenses of your income property, just without the income! Vacancies are an unfortunate reality and can happen for a variety of reasons.
Many new landlords don’t take into account what their financial situation will look like when they have an empty rental unit but still have all the expenses to pay. It’s important to have a plan in the event that a vacancy happens to ensure you can still afford to maintain your property until your next tenant signs a lease. Planning for marketing prior to the tenant moving out is often overlooked by do-it-yourselfers leading to unnecessary vacancies.
How a Property Manager Can Help
A good property management company will not only have a plan in the event that a vacancy happens; their entire process is based around preventing vacancies in the first place.
The right property management company will be experienced in screening tenants and conducting regular maintenance to prevent larger issues and costs. A property manager will handle all the administrative steps for you, allowing you to enjoy extra income without all the extra work.
Managing a rental property doesn’t come without challenges, but with the right team, you can make having an income property easier and less stressful. With over a decade of experience helping clients successfully manage their income property, Circle Property Management understands the challenges and costs that come with being a landlord.
Get in touch today to learn how our professional team can help you manage your rental property throughout Northern Virginia and DC!