Buying a rental property creates an exciting, new opportunity to increase your income and create wealth. That said, it’s important to remember that renting out property is no “get rich quick” scheme; being a landlord or landlady comes with a set of responsibilities, and as such, you may face certain challenges along the way.
4 Common Challenges Landlords Experience (And How To Overcome Them)
1. Tenants Who Stop Paying Rent
Unfortunately, there’s no way to completely eliminate the risk of renting to someone who can’t keep up with payments. Even the most financially responsible people can fall on hard times unexpectedly and have trouble keeping up with bills.
Thankfully, though, there are some precautions you can take to help lower the risk of losing money on your rental home. For starters, carefully screening each prospective tenant is a great way to immediately weed out those who have a history of missing rent payments or defaulting on loans. You can also include a clause in your lease agreement outlining additional fees the tenant will be responsible for when rent is not paid on time; doing so may even discourage the tenant from missing rent in the first place.
2. Tenants Who Break The Lease Early
This is probably every landlord’s greatest fear, along with tenants who don’t keep up with rent payments.
Initially, the thought of a tenant breaking your lease contract early may sound like a disaster, but that’s not always the case. A carefully structured lease agreement can protect you from suffering financial losses if the tenant decides to leave early.
Additionally, by keeping up with routine maintenance and making sure your rent is on par with comparable homes in the area, you’ll be more likely to attract interested renters in a timely manner.
3. Periods of Vacancy In Between Tenants
Because your profits rely on consistent rent payments, periods of vacancy will inevitably lower your ROI. This being the case, your goal should be to maintain a home that attracts the interest of as many renters in the area as possible. In other words, you’ll want to pay close attention to your neighborhood’s rental market to make sure your property is priced accordingly, given how the home compares to others in the area.
When in doubt, consult with a real estate professional or property manager to best determine how you can attract tenants to your property and avoid long periods of vacancy.
4. Property Damage
At some point, every landlord’s income property will suffer some physical damage. Whether caused by a tenant, extreme weather conditions, or some other unforeseen circumstance, property damage is practically unavoidable. If you happen to be handy and feel comfortable making repairs yourself, then dealing with property damage may not be a major concern worth worrying about in advance.
Alternatively, if you are not comfortable making your own repairs, or if you don’t live near your rental home, you can prepare for worst-case scenarios by either hiring a local property manager to address these kinds of problems for you.
Trust The Top Property Management Firm In The Bay Area
Intempus is proud to be one of the Bay Area’s most highly-rated property management firms. If you own a rental home and would like to learn more about how we can be of service to you, please get in touch with one of our friendly staff members today!