Investing in real estate can be a great opportunity and a way to set up your retirement. However, there are many aspects of being a landlord that people don’t realize at the beginning. It is important to hire property management if you don’t want to deal with the day to day issues like we list below. Here are some things that we run into…
1. Problems with Collecting Rent
Tenants come in all shapes and sizes. You’ll have great tenants that pay the rent on time every month, and you will have tenants who simply do not pay, and do not call. The biggest problem with tenants who fail to pay rent is the effect it has on the landlords' own expenses. Not only is the landlord losing money when a tenant is refusing to pay, but many landlords are still paying mortgages on their rental properties and must then find another way to pay their mortgages. A landlord might also need to take legal action and start an eviction process which can take months, and each month you are loosing money.
2. Stress of Property Management
Although you might do a complete background check on a tenant before they move in, some issue tenants might slip through the cracks. This will potentially have you dealing with problems like illegal drug use, Destruction of property, lawsuits, unpaid rent, tenants lying to you, noise complaints, dealing with police complaints, and much more. Did you know that you can receive citations if you maintain a property like this?
3. Keeping your property Safe
If a tenant is injured on a property that you own, there is a good chance that you will be sued. Make sure that you have home owner’s insurance and maintain your duty to keep your property in good working order and knowing the building and safety codes in your area.
4. Paying Taxes
Renting a property to someone is earning you money, so of course you are obligated to report the income you earn when you file your taxes every year. This can make filing taxes more complicated, and more expensive. If you own the home you live in plus one rental house, your property tax bill could be double what you were paying before you purchased the rental.
When your tenant is not paying rent, violating a lease, damaging your property, or giving you other reasons to start an eviction you will need to file an eviction notice in court. Evictions are often extremely costly and time consuming. Loss of rent, the cost to file in court, renting a storage to hold the tenant’s belongings, making repairs and cleaning up can easily cost you thousands of dollars. Not to mention telling a family that they have to leave their home isn’t always the easiest or most comfortable thing to do.
If you are looking to get out of being a landlord, we are interested in purchasing your property. Please contact Amy at:
Amy Hopfinger Strauss
Homestead Realty Inc.