Most probably, a big percentage of the world’s population in one point of their life have to rent house before they got their very own property. The pain of disbursing some of our hard earned money to the property owners as rent is all equal to us. These leaves us all yearning and dreaming of becoming rental properties owners someday in our life as we think and know the owners really enjoy getting our money.
Though financially independence is known to be achieved, what are some of the other things that you should know about owning a rental property? Let’s find out in this article.
1.) Taxes and Insurance
Having invested in a rental property that is also a non-current asset, you’ll have fear of losing it all. One of the fears will be that of tragedy such as fire that could burn down your property. To feel safe over your property, chances are you will join an insurance policy.
On top of that, the rental income can be subjected to income tax so be prepared to put aside few thousands of your rental income as taxes.
2.) Tenants and Damages
You’ll encounter different types of tenants who will lease your property. Some may be good and responsible tenants and others irresponsible ones. A tenant might vacate your premises and you might be astonished of what you encounter. Responsible tenants are known of paying their rent on time, following the rules provided and even reporting anything that they might experience on their houses. On the other hand, the irresponsible ones are known of handling things on their own. They may break a window and instead of notifying the owner, they replace them on their own. They are also known to be rent defaulters and can even steal your things while they are vacating. Its best you keep a close monitor on your rental properties.
3.) Unexpected and Expensive Repairs
Tenants cater for the houses repair that ought to be done in the houses they were leaving in when vacating. Especially if the tenants made the damages themselves such as destroying doors and windows or when a house needs to be repainted due to their fault.
As a property owner, shock might come your way as you realize some costs will come out of your own pockets. Some things like refrigerators, air conditioners and even stoves might have served for a long time and need to be replaced or upgraded. Be prepared as these costs are solely yours.
4.) Being a Landlord isn’t for the faint hearted
You’ll struggle a lot in the process of buying and acquiring rental properties. The fruits that include having a financial freedom and great profits will only be achieved if things are done in the perfect way.
It is always important to follow the laws where there is necessity, keep an eye on all your rental properties and regularly screen your tenants in order to protect the property you really struggled to acquire. Learn to save for all the repairs that might come or might not come up your way.
5.) Deciding to invest in rental properties is one of the best decisions
Land and property is best known to appreciate in price and value in each and every new day. By investing in rental properties; you tend to be creating a new source of income that will happen to be securing your future. For a start, you might not be experiencing the new source of income as maybe all the income you get could be channeled towards repaying a loan that you could have taken and also catering for expenses and repairs. However, you are on path to securing your future as the property will supplement the retirement’s benefits income in future.
A property investment will often yield a handsome return but without proper management and knowledge, your investment could do more harm. Always remember to be prepared for all sorts of obstacles you might be facing while dealing with your rental properties.