Every year, many people leave the corporate world with hopes of hitting it big in the world of property investments. If you’ve been toying with the idea of becoming a property investor, the thought of becoming a landlord has probably crossed your mind, and you might be wondering what the pros and cons are for owning a rental property. In our last blog, we reviewed several major advantages to being a landlord, and today we’ll take a look at some of the drawbacks.
At Cash 4 Kansas Homes, we have more than 50 years of combined experience in the property investment arena and we know that there can be many disadvantages to renting out a property you own. If you’re in the Overland Park area and ready to make your exit from the rental market, contact us today at 913-276-0769 to request your fast and fair cash offer! We’d love to help you out!
On Call 24 Hours a Day
When you are a landlord, your tenants will rely on you to provide a property that is safe, secure, and free of maintenance needs. If the plumbing in one of your properties springs a leak in the middle of the night, or if there is some other maintenance issue on a holiday, you will be the first person your renter calls. Because your rental home is an investment, it’s wise for you to respond and remedy the situation in a timely manner to prevent unwanted damage to the home. Some property investors choose to hire property management companies to handle maintenance problems for them, but this is an added expense that some landlords don’t want to incur.
If you choose not to hire an outside company to help with maintenance needs, you should be prepared to coordinate them yourself. Some people are not very mechanically inclined, and if that’s you, you’ll probably wind up spending significant time on the phone coordinating dates and times with contractors to get any needed repairs completed. If you choose to become a landlord, you’ll need to decide what is more important to you: maximum profit or undisturbed evenings, weekends, and holidays.
Risk of Troublesome or Unreliable Tenants
If you’ve ever had the opportunity to speak with someone who was a landlord for any period of time, he or she is bound to have a few stories of nightmare tenants. Troublesome tenants can cause many problems for landlords, and you should be prepared to deal with everything from bed bug infestations to criminal activity happening at your rental property. Aside from possibly causing damage to the home, tenants may not always be reliable to pay their rent on time, potentially putting you in a tough spot financially.
As a landlord, the process of vetting potential tenants falls on your shoulders, and you might feel that some of the expenses related to this process are not worth paying. For example, in order to get a good, quality background or credit check on a possible tenant, you will need to pay a fee to a reporting agency. However, not all possible issues can be weeded out with background and credit checks. When it comes to protecting your rental investment, a ounce of prevention is definitely worth a pound of cure, and meeting extensively with would-be tenants ahead of time can save you time and frustration down the road.
Taxes, Fees, Insurance, and Unexpected Expenses
One of the largest risks a property investor faces is financial in nature. Owning a home is a costly venture, whether it’s your own personal house or a rental property. Unless you own your rental home outright, you’ll have ongoing expenses like the mortgage, property taxes, homeowners insurance, and homeowners association fees. These expenses must be paid whether or not you have a tenant in the home, and if you have a hard time renting the property out, this could put you in a financial bind.
In addition to the ongoing payments, taxes, and fees, there’s also the potential of other unexpected expenses popping up when you least expect it. For example, if there is a water leak in the home, there is always the risk that mold remediation and/or asbestos abatement will be needed as part of the repair process. Something like this could cause the home to be uninhabitable, and if your tenant cannot live in the home, you may be missing out on his or her monthly rent payment on top of everything else unless your lease specifically speaks to these types of situations.
How Can I Sell My Unwanted Rental Property?
Unsure whether or not the benefits of becoming a landlord outweigh the disadvantages we’ve discussed here? It might be beneficial for you to map out the pros and cons on paper before making your final decision. Seeing the advantages and disadvantages side by side may be just what sways you one way or the other.
If you’re a landlord who’s tired of dealing with late night calls, unreliable tenants, and the financial risks associated with one of your properties, we’d love to take it off your hands for you! Contact us today at 913-276-0769 to request an assessment of your Overland Park property by Cash 4 Kansas Homes! We’ll do our best to get you a fair cash offer within 48 hours and partner with a reputable title company to conclude the closing in as little as 14 days. It doesn’t get any easier than that!