If you’ve got a second property, or perhaps you’ve recently inherited a house, you might think that in the long term, renting your property out will make you considerably more than merely selling it straight away. For the most part, you’d be right. Renting out a property can be a fantastic way to make a passive income. Many landlords even go on to buy more properties, increasing their income and their future options.
But, it’s rarely as easy as people think. A lot of work goes into managing a rental property, and many landlords find that they have to commit more time and money than they’d expected, making the whole experience incredibly stressful. If you’re considering renting out your property, do you truly understand the costs? Let’s take a look at some of them.
Finding tenants might seem easy, but if you want to do it right, it can be a considerable expense. First, there’s the cost of advertising your property, which might include cleaning costs and photography as well as the advertisement itself. Then, once you find a prospective tenant, there are screening and application costs.
Many landlords are tempted to skip these costs and rush to fill a property in order to avoid the loss of income that comes with an empty property. But this option can become even more costly in the long run. The wrong tenants won’t care for your property, they might be late or negligent with paying rent, and they are unlikely to last long, leaving you with the prospect of expensive cleaning and repairs before you get to start the process of finding a tenant all over again.
There are far more laws to protect tenants than there used to be. It is, of course, wonderful for all parties to be protected, but it can make a landlord’s life difficult as you’ll need to be very diligent in fulfilling all your responsibilities to your tenant. Unless you have legal experience of your own, you’ll need to hire a lawyer to draw up contracts and agreements. You might also want legal assistance to help you write up an eviction notice or to offer you advice on any complaints raised.
Again, it’s tempting to cut costs here. But if you fail to comply with laws, you could find yourself facing even more expensive court costs and fines.
As a landlord, you are responsible for the structure of the property, as well as the boiler, electrics, water supply, and any furniture or equipment that is part of the lease. You’ll need to pay for regular services and repairs as well as see to any complaints or repair requests from your tenants. Maintenance costs can add up to become a big expense in both money and time.
Your tenants will be responsible for the day-to-day cleaning of their home. But, as a landlord, you’ll need to pay for end-of-tenancy cleaning, as well as the regular cleaning of any communal areas.
Loss of Income
The real cost of renting out your property isn’t just in the money that you spend. It’s also in the money that you lose from your regular income when you have to take time off work to deal with your rental, as well as the costs incurred during periods when your property is empty.
Could Rental Property Management Help?
A rental property management company can help you manage your properties successfully. While hiring property management is an expense, it can save you more money by taking care of the daily management of your properties, preventing costly and unexpected repairs, reducing the need for legal assistance, and protecting you against lawsuits, all while saving you time and providing quality care for your tenants.