We all know that investing in real estate is one solid way to increase your income. One way is through capital appreciation. Another is through rental real estate, which gives you a monthly income. It is one of the few investments that does extremely well even in times of increased inflation. However, before you go buying and renting residential properties, there are many things to consider. Being a landlord may sound like an awesome perk, but it can be extremely stressful and expensive. This is true especially if you have to invest in a property that has not been well maintained, even at least with a management inspection software.
There is probably more to owning a property than what you see; MSN Real Estate shares that there are actually many woes of being a landlord. In fact, there are different expenses associated with rental properties that may take newbie landlords by surprise. Before jumping into the real estate bandwagon, it is important that you take a good look at these matters:
- You’ll be faced with increased insurance costs. Some rental homes may cost more to insure than to rent. This is the situation faced by homeowners who were not able to sell their homes. If you are planning to rent out the property you once lived in, your status changes from “occupant” to “investor”. This means that you will need to insure the home with a landlord insurance coverage, which is 25% more than that of the usual homeowner’s insurance. Your tenant’s lease may be able to help covering the increased costs, but it’s not something you should always count on. One way to prevent this? Using property inspection tools in discovering a house’s defects so you can escape buying a property with an unforgiveable flaw.
- You’ll have to pay legal charges. Landlords are required to budget for time and money in getting legal advice for their investments. This is a standard protocol for the real estate community and if you’re starting out as a novice, you better prepare for this. Expenses include administrative costs when it comes to interviewing tenants, looking at their credit histories and performing background check. You cannot minimize legal costs, but you can reduce instances where you have to pay for charges by finding a good property with little or without shortcomings. Use tools like SnapInspect in your digital property inspections.
- You’re required to handle cleaning and maintenance costs. In order to attract new tenants, you may have to spend as much as $1,000 or more on cleaning and caring for the property. This is because the same problem which hinders you from selling your house may be the same reason why you can’t rent it. Potential buyers or renters may not be willing to take your house as is, which is why you have to spend time, money and effort in assessing the site, beautifying it and upgrading its utilities in order to match modern needs. But one way for you to determine faults and flaws in your property is by using just a simple tool: a property inspection software which alerts you on what you should resolve as soon as possible.
While these warnings can be intimidating, the perks of being a landlord remains the same. You can maximize your investment by knowing your property’s defects beforehand with a property inspection app which you can download and use with your tablet or smartphone. A little investment goes a long way.