We have been discussing the ins and outs of investment properties this month and one of the biggest aspects that accompanies owning an investment property is the fact that you assume a new title: Landlord.
While owning an investment property comes with many benefits, the biggest downside would have to be being a landlord. The more prepared you are for the experience, the better off you will be.
There are multiple facets that go into being a landlord and a few of those to keep in mind are:
Finding tenants: Going through the process of finding tenants is not the easiest. You must look at the credit scores of applicants, perform background checks, look at their rental history, interview the tenant, and more. You want to make sure it’s someone who you can trust.
Maintenance: You are the maintenance person now and must be on call 24/7. So when the water heater goes out at the property and starts spewing water at 2 am, you’re who they are going to call, and you have to get it fixed. The extra money that you have been collecting from your investment property now goes into buying a brand new water heater. That is just a part of owning an investment property.
Clean Up: After a tenant moves out, you will have to clean the property. Many times, because they are renting and it is not their own home, tenants might not treat the property as well as they should. So you will need to clean it up, get carpets cleaned or replaced, and in some cases, perform any necessary maintenance.
Vacancy: While you are cleaning up, doing any maintenance, and then showing the property and searching for a new tenant, you will have periods of vacancy. You need to be prepared for this and make sure you have the necessary funds prepared to cover you.
There are many items to consider when thinking about purchasing an investment property. It is especially important to think about your new role of landlord and all the responsibility you will be taking on in this new role. An investment property can be very rewarding, but you must weigh all the pros and cons before diving head first into such a big transaction. If you have any further questions about investment properties, we would be happy to answer them or point you in the right direction.