When you own or operate single-family rental homes, surprises are rarely welcome; it is almost never a good thing. This is particularly true when those surprises are unexpected costs or expenses. In Chevy Chase, unwelcome surprises may await the new real estate investor. With proper foresight of the most common hidden expenses, however, rental property investors can be prepared to face these unexpected events.
Every single-family rental owner needs a good quality landlord liability insurance policy. But that doesn’t mean that the policy must be the most expensive one you can find. The policy rates of insurance companies can vary widely, as can their quality and reputation. This makes it important to shop around before choosing your landlord insurance policy and to check your rate annually for changes. You should be careful comparing rates and insurance carriers, if you don’t, you may end up paying far more than you need for your landlord insurance.
Another unpleasant revelation to note is that of the property’s utility bills. An energy-efficient property is one that has relatively low energy costs. New investors, however, might be surprised to realize that an investment property can come with high energy price tags. Although the reasons for this vary, multiple options can be explored by the property owners as to the way they can make their rental property more energy efficient. To get a better idea of where the issues may lie, you can have the house checked for air leaks, aging appliances, and other energy “vampires”. Replacing weather-stripping, single-pane windows, lightbulbs, and other leaky spots can go a long way toward lower energy costs. With a few simple fixes and some annual maintenance, you can significantly reduce your rental home’s energy bills.
Erosion Prevention and Repair
New owners of a rental property will discover that each season can bring surprises of its own. Warm spring weather sometimes reveals erosion issues that were not visible in colder months. As such, the cost of erosion prevention and repair may come as an unwelcome surprise. As soil is eroded from a home’s foundation, water can pool and result in damage. Homeowners need to secure their homes by making sure that it has proper drainage and has been thoroughly checked for signs of soil erosion. This provides safety against any unknown prevention and repair costs.
Even the best single-family property owners may face unexpected legal fees at certain moments. Working with tenants is rarely easy, and disagreements can and do happen. And though budgeting for a future lawsuit seems commendable, measures should be taken to prevent a lawsuit in the first place. Performing regular maintenance on the property and responding promptly to repair requests is a good start towards responsible ownership. In order to stay safe and out of the courtroom, a few arrangements need to be made. Such as ensuring your property is compliant with safety standards, providing basic safety equipment, and checking for hidden problems like mold, lead paint, or asbestos. Practice following your lease agreement, and encourage your tenant to do the same to avoid tenant lawsuits and keep legal fees at bay.
Inadvertent Appliance Damage
A final unwelcome surprise that might shock the new rental property owner is how quickly appliances seam to wear out. The cost of replacing major appliances every few years can have any investor feeling sticker shock. The trouble isn’t necessarily that tenants are abusing the appliances, but rather that they may be accidentally damaging them due to insufficient knowledge of how to properly handle them. An excellent method to keep your rental home’s appliances running longer and better is to educate your tenants on proper appliance use and care. Instructing your tenants to use the appliances correctly and to perform a few basic maintenance tasks will significantly extend the life of your property’s appliances.
Now that you know about the potential costs that come with owning single-family rental properties, you can be better prepared to reduce or avoid them. A considerable number of predicaments that come with real estate investments can be prevented by being proactive with tenant education, property maintenance, and cost comparisons.
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