Multiple investment properties are a sure way of becoming a property owner and a happy one at that. You should take time to understand what is involved in being a property owner. Know what you stand to gain and what you stand to lose, even though the benefits are on the higher side.
Here are some of the issues that you are like to deal with as a property owner:
1. Initial capital
As a prerequisite, potential property investors must structure an investment plan. Note that if you purchase an outdated home, you will naturally have to dig deeper in terms of repair and maintenance. Any worn out foundation or wiring and plumbing issues must be attended to; with your money.
2. Be equipped with repair terms
As a property owner, you will be faced with a number of repair issues and this will need you to have your finances in order at all times. Alternatively, you could enroll for a home warranty policy and you can bid repair calls goodbye. As a property owner, there are two things that you cannot escape; taxes and repairs. Failure to this might see you being sued for extra damages. Repairs can easily drive you up a wall because as soon as you are done with one, another one comes up.
3. Rent collection
This cherry part is what makes that makes everyone want to be a property owner. Actually, not a single property owner has ever complained about being overwhelmed by this extra income called rent. Well, if you have cooperative tenants who pay in good time, you will have such a roller coaster and smile to the bank every end month.
4. Stubborn Tenants
This is every property owner’s nightmare yet they are out there in drones. These tenants will do anything but pay the rent in good time. They will go to greater heights to dodge you when the time calls for it. You can curb this by issuing a deadline rent date.
5. Evictions
As a property owner, you must revise tenant laws and recite them at heart. You need to understand that eviction is not as easy as they make it look. You have to first file a notice at the local court, schedule and be there on the date that you settle for and even after judgment is passed, you cannot just kick out the tenant without following the right procedure.
6. Paying Taxes
You can never overlook taxes, especially if you are a property owner. You are required by law to indicate the income whenever you file your taxes every year. Property owners are notorious for overlooking property tax. Unknown to them, the property tax bill could be more than the agreed or initial payment. You should understand the fine print regarding tax effects and be prepared to foot them.
7. Finance management
First time property owners are usually bombarded by the overwhelming source of income that they did not work for that month. However, this should not be the case. For starters, you need to understand that property management is actually a rotating door.
Tenants are not permanent and while some will re-apply their lease, a good number of them leave to better or more affordable premises once their lease expires and your property may take a while before you get new tenants. You should handle your finances with care and if possible, get a professional to manage your income.
Potential property owners need to refrain from overlooking different costs such as remodeling, and repair. Be ready to earn your money because being landlord is a full time job.
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