Rental properties come with expenses. Some are big, some are small, some are expected and some come as a big surprise but there is always something that comes up so landlords need to be prepared.
Here are some of the more common expenses that a landlord can expect with their rental properties:
- appliance repair or replacement
- carpets, painting and floors
- extra mortgage payments if there are no tenants in the property for a month or two
- tenant gifts, tenant baskets
- yard maintenance
- major repairs like the roof or foundation
- garage doors
- furnace or air conditioning
So, why is it so important to repair and maintain your properties? First, your tenants are paying off your investment so they deserve to live in a property that is safe, secure and has everything in good working order. Second, a good landlord that responds promptly to requests for maintenance will be much more successful in building long term tenant relationships which are the cornerstone of a good rental property business. Third, looking after your properties will also add value to your investment as your property values continue to rise with these improvements, repairs and maintenance.
If you’re like most people, you likely don’t have a lot of extra cash on hand every month but that should never stop you from looking after your investment. Ignoring problems can and will lead to run down properties and a lower grade of tenant.
There are two key ways to overcome the problem of unexpected expenses. The first is to try and build a reserve fund from your monthly rents. If you have any surplus after your bills are paid each month, put this aside to cover these expenses. The second is to have access to credit. Putting a line of credit in place for these expenses will give you piece of mind that you can handle the unexpected and with interest rates so low, you can pay it back quite easily in small increments.
For new landlords, there are always fears and uncertainties when buying that first property. Anything that can be put in place to ease those fears is a good thing and will be so helpful in moving the dream into a reality. To your success!