5 Major Setbacks of Being a Landlord
Despite all the current austerities in the real estate sector, investing in properties have remained a lucrative option. If you are a parent willing to leave behind something solid to ensure a safe future for your children, you can always consider investing in income generating properties. There are, however, many pitfalls when you become the landlord.
Before you make a final decision, go over the following conditions that you may have to face.
After winning the ownership of a property, other costs are likely to make your pocket lighter. Costs of remodeling, upgrading, and mending are to be borne by the new owner. Moreover, there is no guarantee that you will get tenant every month. Thus, what seemed like a foolproof investment decision could be proven disappointing.
Financial fluctuations are a major drawback that asks you to manage savings appropriately. Don’t blow away the fund you have reserved for major repairs, vacancies, and late rent. A four month cushion is a safe way to go.
Being a landlord means getting endless calls about almost everything, as soon as a tenant moves in. Even, you should be mentally prepared to receive a call every week about repairs. During the first few months it can go up.
The prevalent law asks the landowner to complete any repair works in the soonest time possible. Otherwise, the owner will be responsible for further damages.
Pro Tip: Invest in a home protection plan and save thousands of dollars. And in the lease agreement include that the tenant has to notify you to any repairs three days following their move in date; on expiration of which, any occasional tear and wear are to be compensated by the tenant.
Finally, there is no uniform screening process to know who is going to pay the rent in time. This totally depends on your luck!