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Tips
Investing in Rental Property
Common and Deadly Property Investment Mistakes
Most
guides and
tips investing in rental property focus purely on the benefits and
rewards of rental property investments. Just like there are 2
sides to a
coin,
it's equally important that you know what are the worst rental property
investment mistakes so that you can learn how to avoid them.
Find out how you can effectively lower your risks right now when it
comes to investing in rental property:
Make
Sure that Your Rental Property Meets the Local Housing
Codes
As
the owner of a rental property, you are responsible for making sure
that your rental property is in habitable condition. Failing to meet
the local health and safety housing standards is one of the common
rental property investment mistakes among first time landlords.
These are important tips investing in rental property
when it comes to choosing your rental home. You may be getting that
run-down shack at a great bargain, but getting it up to shape may
easily cause your repair bills to run into the thousands.
That
is why it's highly recommended that you hire a licensed contractor or
home inspector to give you a more accurate estimate of the repair
costs.
Once you have tenants living on your rental property,
it's only a matter of time before something needs repair due to daily
wear and tear. While replacing a faulty light bulb is child's play,
other major repairs such the rewiring your entire rental
property
can burn a deep hole in your pockets.
That's why
tips
investing in rental property usually include keeping a stash of money
on standby for emergency and critical property repairs.
It
is Not that Quick or Easy to Buy and Sell Your Rental Property
Compared
to other investments such as shares and commodities, rental properties
are generally considered to be illiquid assets. What this means is that
it is harder to convert your rental property into cash when needed.
Buying
and selling rental property can be a draggy and complex affair.
Finding your buyers or sellers, negotiating the terms of the deal and
handling the necessary paperwork takes at least a few weeks.
The
costs that you have to fork out aren't cheap either - Your
transaction,
insurance, agent and legal fees can add up to thousands of
dollars quickly.
Now compare this with the buying and selling shares - All it takes
is a phone call to your broker or an online visit and you can be
trading shares in minutes. Depending on your trading volume, brokerage
fees for share trading are usually much lower as well.
You
May End up Running into Nightmare Tenants or Suffer from Vacancies
Unlike
paper assets which are mostly hands-free operations, investing in
rental
property usually means having to get down and dirty with the management
of your tenants.
Sometimes
you may run into nightmare tenants who don't pay you rent or repeatedly
break the rules of your rental agreement. That's when it becomes a real
challenge for you with all that complaints from neighbours, property
damages and even messy eviction lawsuits.
If you need tips
investing in rental property, the most that we give to screen each and
every potential tenant carefully - Have them fill in application forms,
check their references and run credit checks on them. Seasoned rental
property owners have a popular saying, "Having the right tenant will
eliminates 80% of all potential problems".
Rent from your tenants is the vital
lifeline of any rental property investment. The moment your rental
property is vacant, you start losing
money. Not having a sum of reserve cash to pay for your
mortgage during down periods is one of the worse rental
property
investment mistakes you can make because you risk losing your
entire property.
Read
what our visitors have to share below OR Scroll down to
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What Were Your Worst Rental
Property Investment Mistakes?
As rental properties are commonly long term investments, it's vital to avoid any nasty traps. Do you know of any deadly mistakes to warn everyone about? Share your valuable tips investing in rental property with everyone here - We will love to hear your tips, comments and real life stories:
What Our Visitors Have to Share on Rental Property Investing Mistakes
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