Surprises are rarely a good thing in the single-family rentals industry, especially if the surprise is an unexpected cost or expense. Nobody welcomes that at all. There might be a few unwelcome surprises for the new real estate investor in Plantation. Hence, gaining insight into a few of the most common hidden expenses will greatly benefit rental property investors.
Every single-family rental owner needs a good quality landlord liability insurance policy. However, that doesn’t mean that the policy must be the most expensive one you can find. Insurance policy rates can vary widely, as can the quality and reputation of the company that offers it. This makes it important to shop around before choosing your landlord insurance policy and to check your rate annually for changes. So, to make sure you won’t have to pay far more than you need for your landlord insurance, make sure you are carefully comparing rates and insurance carriers.
Another matter that may need consideration is the property’s utility bills. An energy-efficient property is one that has relatively low energy costs. High energy price tags are, however, what new investors will find with their new investment properties. Reasons for this vary, but multiple alternatives may be taken to make a rental property more energy efficient. Checking the house for air leaks, aging appliances, and other energy “vampires” can help you get a better idea of where the issues may lie. Replacing weather-stripping, single-pane windows, lightbulbs, and other leaky spots can go a long way toward lower energy costs. With a few simple fixes and some annual maintenance, you can significantly reduce your rental home’s energy bills.
Erosion Prevention and Repair
New owners of a rental property will eventually understand that each new season can bring surprises of its own. Warm spring weather sometimes reveals erosion issues that were not visible during colder months. In cases like these, the cost of erosion prevention and repair may come as an unwelcome surprise. As soil is eroded from a home’s foundation, water can pool and result in damage. Guaranteeing that your house has proper drainage and has been thoroughly checked for signs of soil erosion helps in avoiding any unknown prevention and repair costs.
Even the best single-family property owners may eventually face unexpected legal fees. Working with tenants is rarely easy, and disagreements can and do happen. Preparing a budget for a future lawsuit seems sensible; however, it’s wise to plan a course of action that will prevent a lawsuit in the first place. Performing regular maintenance on the property and responding promptly to repair requests is one of the many preventive measures that can be taken. Furthermore, ensuring your property is compliant with safety standards, giving basic safety equipment, and has been checked for hidden problems like mold, lead paint, or asbestos are a few of the many ways one can steer clear of the courtroom. Following your lease agreement, and encouraging your tenant to do the same, is one method to avoid tenant lawsuits and keep legal fees at bay.
Inadvertent Appliance Damage
Finally, an unexpected cost that the rental property owner might face is how quickly appliances seem to wear out. The cost of replacing major appliances every few years can have any investor feeling sticker shock. The trouble isn’t necessarily that tenants are abusing the appliances, but rather that they may be accidentally damaging them because they don’t know how to operate the machines. Educate your tenants on proper appliance use and care to keep your rental home’s appliances running longer and better. Aside from using the appliances correctly, performing a few basic maintenance tasks will significantly extend the life of your appliances. For the benefit of both parties, encourage your tenants to take these two simple steps to heart.
There are a number of unpredictable expenses attached to the opportunity of owning single-family rental properties. Knowing this can lead you to be better prepared to reduce or avoid them. Proactivity in tenant education, property maintenance, and cost comparisons, can lead to better prevention of multiple issues that are ever-present in the world of real estate investments.
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