Rental properties are a great investment. Buying and selling at the right time plus the passive income in the meantime allows landlords to be in a comfortable position financially. Of course, this doesn’t come easy at first because of the necessary learning curve involved which exposes landlords and investors to risk. Here are the top risk factors and how you can beat them:
- Spending Too Much Time Getting Rental Properties Ready for Occupancy
It is paramount to get a property rent ready in a timely manner. Repairs and revisions have to be done correctly and in quality fashion. Others like to take months and months, others in a matter of days or a couple of weeks. These delays increase risk from various aspects such as accruing taxes, insurance, and loan payments. The bottom line is nobody wants to go broke before securing a tenant.
- Taking Too Long To Get a Property Rented
Aside from the obvious loss of income, risk to damage such as vandalism and squatters are some of the few things that could possibly happen to unoccupied rentals. Whether you have 5 or 50 properties sitting empty, it’s never good. Seasoned landlords use the best systems to make sure that properties are ready and occupied as soon as possible, from streamlining the necessary steps in preparing units to utilizing multiple channels to get noticed by potential tenants.
- Determining the Appropriate Rental Rate
Do your own due diligence. Don’t take anyone’s word for what a rental property may go for. If a similar property to yours is priced at $1,000 and has been on the market for a while, then chances are the price is too steep for the market. The market will tell you if you are over or underpriced.
- Excessive Renovations
Don’t overdo a renovation so that you could jack up the prices for your rental. The goal is to make the properties nice and not go over the top, wherein you end up pricing it higher than what the market is willing to pay for. For example, pricing yours at $2,000 when others are priced at $1,000. Chances of getting a tenant would be slim.