Owning and renting out your properties can seem like a glamorous investment. The potential for monthly cash flow might be a sweet deal, but there are several factors that should be considered. If you’re thinking of choosing between selling or renting out your property, the following list can help with your decision.
- Maintenance Costs
Landlords are on call for all kinds of repairs from leaky toilets to broken heating systems. They are often contractually obligated to make sure the property is properly repaired before a tenant moves in. Maintenance costs are a continual cost to renting and are unfortunately very unpredictable.
- Increased Taxes
it’s important to talk to a finance professional for the state laws regarding property taxes. Tax breaks that homeowners benefit from don’t apply when you don’t live in the property. If you’re renting it out, you’ll actually be paying higher property taxes. When talking your finance professional, make sure to find out if the tax breaks you do receive make the increased taxes worth the investment of your specific property.
- Legal Fees
Landlords can encounter numerous situations where legal assistance is imperative. Drawing up rental agreements, dealing with evictions and understanding the proper procedures for legal disputes are just a few. Additionally, it is important to factor in other professional service fees such as processing background checks. Owning real estate rented to others is inherently overloaded with liability.
- Bad Tenants
Inevitably there will be tenants that trash the property and will need to be evicted. Once evicted the real work begins. The cost of course will depend on the extent of damages made. Hopefully the deposit paid by the tenant covers some of the damages, but there is no way of knowing. Unfortunately the time it takes to repair the property will be time that you aren’t receiving rent from a new tenant.
If the hidden costs of renting your property aren’t worth it to you, you can always decide to sell. We’ve encountered many folks who were drawn to a seemingly glamorous and easy landlord role, but then subsequently don’t have the money, time, or patience in dealing with its reality. We can help you make your way to a much simpler profit. Contact us to get a quote within 24 hours and if you’re a fan of that quote you could potentially close within 5 days!