It’s no secret that renting out a property is a good way to bring in extra money and start getting a return on your investment. With that being said, while it is undeniably a profitable option if it’s handled correctly, it is most definitely not a cash cow. Many property owners can quickly find themselves in trouble because they failed to consider just what property rental includes fully. Below, we take a look at some of the common mistakes you’ll want to avoid if your venture into property rental is going to be a success.
Know the Value
You might have a figure in your head about the kind of money you want your property to bring in, but in truth, that figure will have little bearing on how much you’ll be able to charge for rent. Like we said above, some property owners have the idea that their assets will be a cash cow, filling in the gaps that can give their annual income a real boost. Unfortunately, you’ll have to live within the realms of reality; the amount you’ll be able to charge in rent will depend on the size, location, and condition of the property. To get an idea of rent, take a look at what others in the neighborhood are charging.
Take Care of the Insides
It’s important that the infrastructure of the important is in sound condition, but that’s not all that matters: you’ll also need to pay particular attention to the decor, furniture, and all around condition of the inside of the property. Investing in high-quality furniture will make your property more appealing to the best tenants. In any case, once you find a tenant you’ll ideally keep them in your property for years, and they won’t stick around if they find it difficult to feel at home there.
Going it Alone
If looking after rental properties is your full-time job, then you may be able to get away going it alone and taking care of all the tasks yourself. However, for most people, it’s a side gig, and as such, they’re not able to give enough time or energy to make sure everything’s running smoothly with their property. The seriousness of this issue is multiplied when the owner doesn’t live in the same area in which the property is located. To avoid larger problems, hire a company like Vision Property Management to handle the day to day details of property rental. You’ll still be involved with the property, but you’ll be able to have the peace of mind that things are going well even when you can’t physically be there to check up on the property yourself.
Know Thy Audience
When it comes to renting out a property, it’s important that you keep in mind the type of people who will be living there, and what they’re likely to want from a place. For example, if you’re renting out a property that is located nearby to be a university, then making the home family friendly would not be in your interests because it’s likely students who are living there. Different demographics have different needs, so make sure you’re not creating a bachelor pad when you know that people who want those types of properties live on the other side of town. Before you make any decision, always look at it through the lens of: ‘who is going to live here?’
You’re Not Living There
And going on from that, always keep in mind that it won’t be you that’s living there. You’ll need to completely forget what type of property you’d like to live in because while it might be your house, it’s not your home. Stay neutral.
Beware the Additional Costs
You’ll also need to remember that renting a property isn’t just a matter of finding a tenant, collecting the monthly rent, and then living the high life. It’s a two-way street; you’ll make money, but you’ll also need to spend money, too. There may be maintenance checks that you’re legally required to carry out each year, and then, of course, you’ll need to have money available for those essential repairs. Being a landlord is fun and rewarding, but it’s most definitely hard work!
It’s a Business, Not a Side Project
If you already have a job, then you’ll find that you have two jobs if you were renting out a property. A landlord isn’t a side project that you fit around your existing responsibilities; it will take up a lot of your time. You can’t expect great rewards if you don’t work hard! It’s getting to the point where many commentators are beginning to question whether it’s worth becoming a landlord, such is the level of work that’s required in the role. This is one of the main reasons why people are looking to bring in extra outside help for their property management because the many details are too time-consuming.
There are Bad People In the World!
Now, we’re not about to comment on the state of human beings, but we will say that although you and everyone you know are in all likelihood good people, that is not the case for everyone. There are bad people in the world – OK, maybe not bad people, but bad tenants. Every landlord has a horror story about a tenant who caused them nothing but trouble; it happens more regularly than you think. You’ll need to be well versed in the correct procedures for getting the troublemakers out of your property because it can be tricky.
You’ve got a significant investment in your property; it is not the type of thing where you can rely just on gentlemen’s agreements and handshakes. No matter how good you think your relationship is with a prospective partner, it’s important that you document everything; it’ll help everything run a lot smoother should something go wrong.
Becoming a landlord is worthwhile if you know what you’re doing. Avoid these mistakes, and you’ll be on your way to property success!