In the industry of single-family rentals, surprises are rarely a good thing. This is notably true when those surprises are unexpected costs or expenses. And sometimes, what awaits the new real estate investor in Christiansburg are some unwelcome surprises. Hence, gaining insight into a few of the most common hidden expenses will greatly benefit rental property investors.
Landlord Insurance
Every single-family rental owner needs a good quality landlord liability insurance policy. But 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 provides it. This makes it important to shop around before choosing your landlord insurance policy and to check your rate annually for changes. You should be careful comparing rates and insurance carriers, if you don’t, you may end up paying far more than you need for your landlord insurance.
Energy Costs
Another unpleasant revelation to note is that of the property’s utility bills. An energy-efficient property is one that has relatively low energy costs. New investors, however, might be surprised to realize that an investment property can come with high energy price tags. Even though the reasons for this vary, property owners have numerous means as to how they can make their rental property more energy efficient. Getting the house checked 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
In the initial stages of owning a rental property, each season can bring surprises of its own. Warm spring weather sometimes reveals erosion issues that were not visible in colder months. In these cases, 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. Making certain that your rental home has proper drainage and has been thoroughly checked for signs of soil erosion is a good way to steer clear of any unknown prevention and repair costs.
Tenant Lawsuits
Even the best single-family property owners may face unexpected legal fees at any given time. 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. In order to stay safe and out of the courtroom, a few arrangements need to be made. Such as ensuring your property is compliant with safety standards, providing basic safety equipment, and checking for hidden problems like mold, lead paint, or asbestos. Following your lease agreement, and encouraging your tenant to do the same, is one effective approach to avoid tenant lawsuits and keep legal fees at bay.
Inadvertent Appliance Damage
And, another unanticipated cost for the new rental property owner is how quickly appliances seem to wear out. The cost of replacing major appliances every few years can have any investor feeling sticker shock. Abusing the appliances isn’t necessarily where the trouble comes from; it’s that the tenants are accidentally damaging them by handling them without being properly equipped to do so. Educate your tenants on proper appliance use and care to keep your rental home’s appliances running longer and better. Instructing your tenants to use the appliances correctly and to perform a few basic maintenance tasks will significantly extend the life of your property’s appliances.
In Conclusion
Now that you know about the potential costs that come with owning single-family rental properties, you can be better prepared to reduce or avoid them. A considerable number of predicaments that come with real estate investments can be prevented by being proactive with tenant education, property maintenance, and cost comparisons.
At Real Property Management Insight, we can help guide Christiansburg investors through these unforeseen costs. Call 540-998-6917 or contact us online today!
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