Surprises are rarely a good thing when it comes to owning and operating single-family rental homes. This is notably true when those surprises are unexpected costs or expenses. New real estate investors in Ellsworth might face a number of unwelcome surprises. 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. Insurance policy rates can vary widely, as can the quality and reputation of the company that provides it. This makes it important to shop around before choosing your landlord insurance policy and to check your rate annually for changes. If you aren’t carefully comparing rates and insurance carriers, you may end up paying far more than you need to for your landlord insurance.
Secondly, a property’s utility bills may also come as a shock. An energy-efficient property is one that has relatively low energy costs. Eventually, new investors will uncover something about investment properties: they come with high energy price tags. Even though the reasons for this vary, property owners have numerous means as to how they can make their rental property more energy efficient. Getting the house checked 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 during 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. Making certain that your rental home has proper drainage and has been thoroughly checked for signs of soil erosion is a good way to steer clear of any unknown prevention and repair costs.
Even the best single-family property owners may face unexpected legal fees at a certain point. Working with tenants is rarely easy, and disagreements can and do happen. It is a good thing to set aside a budget for any future lawsuits, but it’s an even better thing to prevent a lawsuit in the first place. Performing regular maintenance on the property and responding promptly to repair requests — this is one practice that leads to the prevention of potential legal problems. Not only that, but ensuring your property is compliant with safety standards, has basic safety equipment, and has been checked for hidden problems like mold, lead paint, or asbestos is procedures that secure not only the property but keep the owner out of the courtroom. One of the many excellent means of avoiding tenant lawsuits and keeping legal fees at bay is to follow your lease agreement and to encourage your tenant to do the same.
Inadvertent Appliance Damage
One last possible cost that might surprise a new rental property owner is how quickly the appliances seem to wear out. The cost of replacing major appliances every few years can have any investor feeling sticker shock. Lacking the appropriate knowledge of handling appliances can very well lead to accidentally damaging them. That’s where the trouble comes from, not necessarily that the tenants are abusing them. A good way to keep your rental home’s appliances running longer and better is to educate your tenants on proper appliance use and care. Notify your tenants that correct usage of appliances and the implementation of a few basic maintenance tasks will significantly extend the life of the appliances.
Now that you know several unanticipated expenses that come with owning single-family rental properties, you can be better prepared to reduce or avoid them. By being proactive with tenant education, property maintenance, and cost comparisons, you can better prevent a number of unwanted expenses that come with real estate investing.
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