Arguably one of the best routes for a passive income is by leasing out property. Whether you dream of being a landlord for just one property or an entire multi-unit property, everyone has to start somewhere. However, it’s easier to lose money as a landlord or break even than to make money. You also need to consider what your time and hard work is worth as a dollar amount. Is making a couple extra hundred dollars a month worth dealing with a needy tenant?
A saving grace for many private landlords if a quality property management company which can take over the most demanding of tasks. You can choose to have a management company only handle certain aspects of the rental process or the entire thing. For new landlords, it’s easy to miss out on some of the biggest money wasters and surprise bills. Here are the biggies to get you on track:
1. Property taxes
Property taxes can vary widely from county to country (not to mention state to state). Two houses might have drastically different property tax rates even if they’re just across the street from one another. One of the first things you need to assess when considering a rental property for sale is the taxes and spread it out evenly month by month to include in your rental rate.
2. Maintenance fees
When you’re a landlord, if something needs repaired or replaced in your rental property, it needs to be done right away. For instance, if a painting job is needed, then a residential or commercial painting contractor should be contacted right away. Or if the flooring shows wear and tear, then a new hardwood floor installation will much likely be needed. Hire the Top timber flooring services in Malaysia if you plan to install a new timber flooring. You should also consider updating your property’s kitchen, you may visit a kitchen showroom to get some ideas for remodeling. It’s your job to keep your tenants safe and comfortable. If you go a little too long without fixing that leak, you might not just be facing a higher repair bill but potentially a lawsuit from your tenants.
3. Different definitions of wear and tear
You know when you rent out a property that wear and tear will happen. However, you might be surprised how rough tenants can be on property, yet it’s still considered “normal” wear and tear. If you feel strongly about a property (perhaps it was your childhood home), it might be difficult and expensive to separate business from the mentality of “this is mine.” If your floors are looking rough from years of not being maintained, consider getting professional floor cleaning.
4. The cost of vacancy
Every day a property is vacant you’re losing money. This can be a huge deal if you have a very expensive rental, such as a five-bedroom McMansion in a great school district. Calculate your daily losses and figure out how long you can live with that disparity.
