There’s no doubt that investing in property is one of the best things you can do to give your portfolio a boost. When investing in the right places and at the right time, there can be a great return on investment. However, with that return on investment can come a lot of responsibility that may seem daunting. Difficult tenants, collecting rent, property management insurance, and repairs and upkeep are all challenges that must be faced. In the end, getting over the hurdles will be more than worth it. Here are some of the biggest challenges property investors have to face to bring home the big bucks.
Property That’s Not Occupied
This is probably one of the biggest stressors for investors in property. It might look like you’ve invested in a great spot, but if you don’t get the tenants, then it can quickly become a money pit. To avoid this, it’s important to have a solid gauge of the market, and whether your property will fit a need in that market. A professionally managed and well-run property will be attractive to tenants, so hopefully it wouldn’t be empty for long. It’s never a bad idea to invest in some extras to make it more attractive, such as adequate parking, lawn maintenance, paid utilities or anything else that would have the tenants knocking down your door to rent from you.
Maintenance and Upkeep
Managing a property and keeping it in good shape can be a full time job. If you don’t keep on top of general maintenance and repairs, then you may have trouble not only attracting tenants, but also keeping them. As a landlord, you should know that it is your responsibility for regular wear and tear. If an issue gets out of hand or you decide that you need to do a more thorough renovation job, then you might want to go without tenants while the work is being done. You can get vacant home property insurance for these situations to make sure you’re not left high and dry. Vacant home insurance will could cover the property against damage and liability while there is no one renting the property.
Liability can be a huge detriment to your bottom line. Insurance should cover not just general liability, but also property protection against losses from fire, vandalism or other perils. Property managers may be contracted as a managing general partner for investors allowing authority in their contract to place insurance on behalf of the investors. The property manager can obtain insurance on behalf of the client for the properties they are contracted to manage along with other duties i.e. rental, collecting rent, maintenance, tenant issues, etc.
Investing in a property, and especially if you have several properties, can involve a great deal of paperwork and the need to be well-organized. Permits, financial records and operating costs all need to be properly handled and filed. You can mitigate this stress by having as much as you can done electronically and hiring a property manager to deal with it for you. Paperwork can be a challenge, but there’s no reason it should prevent you from owning a profitable property.
Despite the challenges involved with investing in property, it’s still a very worthwhile endeavor. Property investing can give you a steady income stream with room to grow under the right circumstances. Use these tips to overcome those challenges and make your profit.