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Every property owner needs to be careful when acquiring and managing property for investment purposes. There are a number of issues that can be easily overlooked, or forgotten about. Before jumping into the rental property business, make sure your prepared for possible pitfalls.
We detail six rental property issues below:
Even if you are skilled at accounting, a real estate investment is a entirely different beast. You should hire an accountant to do all the heavy lifting. A real estate accountant can make sure you are following all the rules, paying all the taxes, and tracking every cent that you gain and lose. Accountants are lifesavers for business owners, allowing you to focus on other aspects of rental property ownership.
Some property owners choose to make an investment once they see a stellar price. However, solely making a real estate investment based on price is a huge mistake. When you come across an amazing deal on a property, it’s likely for one reason or another. Whether it be because of a less than desirable location, or it’s a fixer-upper. Avoid jumping to conclusions and review the property rigorously before you decide to buy it.
Housing codes vary depending on the city and state where your property resides. Housing codes cover health inspection requirements, fees, and permits. If these housing codes are not upheld by the landlord, tenants have the right to break their agreement with you.
Every email and phone call with your tenants should be saved and archived. Communication between you and the tenants, ideally would be in writing. Should disputes happen, which is often the case, you will have a copy of previous discussions. Having emails and phone conversations saved can help support you when facing allegations.
Some landlords can’t just help but be nice and give people a chance. If tenants are late on paying you or do not have the necessary funds on time, do not bargain. Give penalties to tenants that don’t pay rent as agreed upon. You are running a business and your tenants should know that if they can’t pay you, other people could.
Check is often a last resort nowadays when it comes to paying. Automated payments should be the only way to go. There is no guess work and lag when receiving funds.
Real estate can be a great investment, but if you do not know what you are doing, it can actually cost you your entire investment. Following these tips and more will set you in the right direction to become a responsible and successful landlord.
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