When you own or operate single-family rental homes, surprises are rarely welcome; it is almost never a good thing. This is even truer if that surprise comes as an unexpected cost or expense. In Irving, unwelcome surprises may await the new real estate investor. However, rental property investors can learn about the most common hidden expenses in preparation for these surprises.
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. The rates of insurance policies can vary widely, as can the quality and reputation of the company providing it. This makes it important to shop around before choosing your landlord insurance policy and to check your rate annually for changes. So, to make sure you won’t have to pay far more than you need for your landlord insurance, make sure you are carefully comparing rates and insurance carriers.
Another matter that may need consideration is the property’s utility bills. An energy-efficient property is one that has relatively low energy costs. High energy price tags are, however, what new investors will find with their new investment properties. Reasons for this vary, but multiple alternatives may be taken to make a rental property more energy efficient. Getting the house checked– specifically 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
Owning a rental property can come with its own challenges, but each new season can bring its own surprises. Warm spring weather sometimes reveals erosion issues that were not visible in colder months. In such 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. Homeowners need to secure their homes by making sure that it has proper drainage and has been thoroughly checked for signs of soil erosion. This provides safety against any unknown prevention and repair costs.
Even the best single-family property owners may face unexpected legal fees sooner or later. Working with tenants is rarely easy, and disagreements can and do happen. And though budgeting for a future lawsuit seems commendable, measures should be taken to prevent a lawsuit in the first place. One way to avoid possible lawsuits is by performing regular maintenance on the property and responding promptly to repair requests. Similarly, ensuring your property is compliant with safety standards, includes basic safety equipment, and has been checked for hidden problems like mold, lead paint, or asbestos are methods that offer legal protection to keep oneself out of the courtroom. Practice following your lease agreement, and encourage your tenant to do the same to avoid tenant lawsuits and keep legal fees at bay.
Inadvertent Appliance Damage
A final unwelcome surprise that might shock the new rental property owner is how quickly appliances seam to wear out. The cost of replacing major appliances every few years can have any investor feeling sticker shock. The trouble isn’t necessarily that tenants are abusing the appliances, but rather that they may be accidentally damaging them due to insufficient knowledge of how to properly handle them. There are many maintenance procedures that can keep your rental home’s appliances running longer and better. One of which is to educate your tenants on proper appliance use and care. The life of your appliances can be extended significantly, and it starts by telling your tenants to use the appliances correctly and to perform a few basic maintenance tasks.
Owning a single-family rental property inevitably comes with unforeseen expenses. Now that you know this, you can be better prepared to reduce or avoid them entirely. Proactivity in tenant education, property maintenance, and cost comparisons, can lead to better prevention of multiple issues that are ever-present in the world of real estate investments.
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