Expenses That Can Sink Your Rental Property

When you first start out in real estate investing, chances are that you will begin to manage a few rental properties. However, while a rental property can be a huge money maker, if you are not careful, you can fall into some money pitfalls along the way. But don’t worry -these money snatchers can be avoided with a little simple preparation and hard work. From seasonal maintenance to investing in tools, here are 6 tips for keeping as much money as possible in your piggy bank, and avoid expenses that can sink your rental property…

Avoiding seasonal maintenance.

If a client’s toilet gets clogged, of course you will send someone out to fix it. However, it is the bigger ticket items that you will have more trouble fixing on a dime. This is why it is good to never avoid seasonal maintenance. Though it will cost you some money up front, it will help to prevent pouring money into broken HVACs, refrigerators and water heater units. Call around your local area for quotes.

Rental application fees.

In some areas, the government requires rental application fees. If you are not charging, you could end up paying at the end of the year. If you find that your area is one that requires a fee, start charging it. You don’t want to pay out more than you have to.

Nixing your property manager/gas and travel expenses.

Yes, it’s true. Your property manager will handle everything with your rental property… for the cost of 10% of each month’s rent. You can save money by becoming your own property manager. Then, simply keep your gas and travel receipts so that you can claim them on your taxes this year. Win/win.

Remembering to keep time sacred.

Time is something that we do not think much about when it comes to money. But trust us… your family will notice when you are taking multiple calls and living in your paperwork. Your health will suffer too. Treat time sacred. Money isn’t the only thing that is worth a lot here.

Having the tools you need.

You likely already have a small tool set, but you are going to need to have more tools in your arsenal now. From a rake and broom to larger tools like carpet shampooers and drills, go ahead and get what you need now. This allows you to fix what you can yourself and to have what you need to keep the property beautiful when you are looking for a new tenant.

Preparing for eviction and vacancies.

When someone is kicked out, you are going to lose money on that month’s rent… however, you will still be losing money as you are looking for vacancies. It is a good idea to have some money set aside for times when this happens. You never know how long it will take to get a new tenant.

Owning rental properties is an adventure and sometimes a risk. However, you can lower that risk by having all your ducks in a row, and making sure that you have covered ever base to keep your wallet as thick as possible.