Many first-time landlords renting out a home believe it will be a simple task. After all, you only have to own a home, find a tenant, and keep up with property maintenance. Wrong. The truth is, being a landlord is often a lot more involved than you’d initially assume. Not only do you have to ensure your property is attractive enough to reel in tenants, but you also have to find a tenant that will treat your property with respect while paying rent on time. Many first-time landlords don’t manage that. Even seasoned landlords still have trouble renting a property without too many issues.
The secret to being a good landlord is knowing the most common challenges so you are prepared to face them. To help make your property a worthwhile investment, be aware of the following common challenges so that you can meet them head-on.
Maintaining the Property
When budgeting as a landlord, it’s crucial to include property maintenance. The issue is that you can never know how many problems the property might endure over the years. It might be all smooth sailing, with the property only experiencing issues that require quick fixes. On the other hand, you might be swarmed with household maintenance problems, from leaky roofs to clogged drains.
To ensure you can cover maintenance costs, keep a savings fund that you only touch when your rental property needs maintenance. That way, you won’t leave yourself out of pocket when the house suddenly has an electrical issue!
Not Finding a Good Tenant
One of the biggest issues cited by landlords is being unable to find good tenants easily. It’s not so much that most tenants are bad – more than landlords want to ensure their tenant is good. That’s because the opposite could be a nightmare, especially if the tenant causes extreme damage to the property or does not pay rent on time.
One of the best ways to ensure you get a good tenant is to screen them. Learning information such as their credit rating and criminal background can help you determine the best tenants for your property. Of course, you must keep discrimination laws in mind while doing this. Generally, the best way to screen tenants is to use a letting agent. Doing so will make the process much easier, and you can be sure you’re abiding by all the rules and regulations. If you’re renting a property in Bristol, teaming up with Hopewell letting agent in Bristol means you’ll have plenty of assistance finding the right tenants.
The Commitment of Time
Some people assume that being a landlord isn’t very time-consuming. While it’s true that you can be a landlord while also doing a full-time job, it’s important not to underestimate just how much of a time commitment it is. Even if you only rent one property to a tenant, you will likely have to deal with several issues over a single year. Plus, you never know when you’ll need to evict a tenant or when a tenant wants to end their contract. When this happens, you’ll need to invest even more time.
Vacant Properties
You might think that you’ll have a tenant comfortably living in your property within a matter of weeks. However, that isn’t always the case. In fact, many rental properties stay vacant for quite some time, which you may not have considered when investing in the property market. The biggest problem is that a vacant property doesn’t offer profit. During this time, it will feel like you’re losing money rapidly.
Finding a good tenant, as mentioned, isn’t always easy. Having an attractive and well-maintained property helps. Again, having a good estate agent by your side is also beneficial for finding tenants.
Making Profit
First-time landlords may struggle to make a profit in the early days. With all the various costs, from mortgage payments to maintenance, you might find your profit doesn’t grow as much as you’d hoped. It’s best to be realistic when it comes to making a profit as a landlord, as you’ll have a lot of things to pay for over the years. To manage cash flow, you might find talking to a financial advisor worthy of your time.
Becoming a Landlord: Is it Worth it?
While being a landlord comes with challenges, entering the rental market can be a great way to boost your income, making it more than worth it for plenty of people. By making yourself aware of the common difficulties, you can prepare adequately to gain fast success as a new landlord.