Being a landlord seems like an exciting prospect because it offers potential property appreciation and an income stream. But if you are serious about letting your property you need to understand it is not as simple as it seems. You need to prepare the property before you start looking for tenants.
Preparing the property to put on rent is costly. It is important that you understand the full cost before moving forward. Make sure that you have enough finances to cover the apparent and hidden cost of letting the property.
Here are a few hidden costs that you should know about.
Cost of Safety Certification:
A landlord is responsible for the safety of the tenants. It is important that the property is safe for the occupants. Electricity and gas are used in abundance in houses and they can be hazardous. A rental property needs to pay landlord safety certificate cost because they are a legal requirement. The electrical, gas and fire safety certificates make sure that the building does not hold any serious hazards.
The safety certificates also offer adequate solutions to handle. It is the landlord’s responsibility to take safety precautions. Apart from installing safety precautions the landlord also needs to invest in regular inspections. The inspections need to be carried out by professionals.
High Insurance Cost:
Insurance offers the perfect safety net to the landlords. It is never a good idea to rent the property without insurance. But the insurance of the property you are letting is going to cost more than a regular one. You need to be ready to pay the extra insurance money.
The maintenance of a rental property is important because it improves its value. The damages of the property are the landlord’s responsibility. If the damages are accidental and repairs are due then the landlord will have to bear the cost. But if the tenant is responsible for damage then you can pay the repairs using rent money.
When a tenant moves in it is the legal obligation of the landlord to fix all the issues. A leaky toilet and roof do not make a good impression. A good landlord should always be ready to pay the expenses so that your property is best for letting.
Real estate market is tough and attracting tenants is hard. You cannot expect people to just walk in to check the property without making an effort. A landlord will have to think about spending some money to advertise the place. The advertisement will make sure that you are able to attract better tenants.
Nowadays social media makes it easier and affordable to market your place. But you may have to hire an advertising company. Make sure that you have an adequate marketing budget.
Plan For The Unexpected:
A landlord should always be prepared to handle unexpected expenses. You may need some extra capital to take care of things. The unexpected costs may include redecorating, deep cleaning, etc. You have to make a good impression and for that, you will have to make necessary upgrades.