Being a landlord is not always easy. It implies a lot of work: finding tenants, advertising the property, conducting thorough screenings, creating and following the rental agreement, move-ins and move-outs, and much more. While it is often perceived to be easy on the surface, a lot actually goes into making a rental property investment profitable and running smoothly. Treating your investment property like a business is a must. Here are 5 reasons why:
1. It can be an emotional rollercoaster
It’s imperative that you keep your emotions out and clear-thinking in. Even if managing your rental property is not your primary job, it is a stream of income. When people get involved, especially when money and contracts are in the mix, emotions can get high. Keeping a clear head and leaving the emotions out will help you find real resolve and understanding of any situation you might find yourself in.
2. Everyone has an attorney – and they aren’t afraid to use them if things head South.
Many DIY landlords don’t even know the very basics of Landlord-Tenant Law, but rest assured that tenants certainly know their rights! In order to conduct fair and honest business, compliance with federal, state, and local laws is a must. You may not agree with every law that’s on the books, but following the rules will keep you out of trouble and will present a standard to your tenants that you’re a professional and in control. Learn, stay up-to-date, and comply!
3. It’s a risky business!
You must always have a risk vs. reward eye when looking at your investment property. Exposed wires, tripping hazards, leaky roofs, and broken window glass are just a few items that come to mind when considering risk. Providing a safe environment for your tenants to live in can be way cheaper than the liability that an unsafe home could place on you. Take care of the exposed electrical, remedy the tripping hazards, fix that leaky roof, and replace the broken glass to avoid premises liability claims that could cost thousands if neglected.
4. Insurance, insurance, insurance
Did you know that there is a difference between homeowner’s insurance and landlord insurance? Landlord insurance is designed to protect against mishaps at a property that is tenant occupied. A homeowner’s policy on the other hand, typically only covers the property if the homeowner is living in the property. Another great policy