You’re making a great investment when you buy a Brentwood rental property. Home values are so high, and your rental values are also rising. There’s a large pool of well-qualified tenants who are competing with each other for well-maintained rental homes.
If you have an attractive home to rent out, you’re in a good financial position.
Even the best investments come with costs, however. You’ll need to be prepared for all of your fixed and variable costs. You also want to think about the unexpected expenses that come with owning a Brentwood rental property.
There’s also inflation. Everything is more expensive today than it was even a year ago. Are you working that into how you plan to pay your bills?
You’re likely budgeting for your mortgage payments, taxes, insurance, and property management fees. But what about these costs that might catch you off guard?
Here are some of the expenses you don’t want to forget when you’re budgeting and preparing to rent out a property.
Vacancy and Turnover Cost More than You Expect
Your rental property won’t be occupied 100 percent of the time. There are likely to be a few weeks or even a few months of vacancy. That’s a financial stressor.
Turnovers between tenants will require cleaning, maintenance, keeping up with utility payments and landscaping, and then marketing the property for a new tenant.
Vacancy costs are especially expensive because it’s money that you can’t really recoup. The longer you don’t have a tenant in place, the more your investment costs you. You’re not earning any money on your unoccupied home.
You can minimize these costs with a strategic marketing program, which will attract well-qualified tenants and get them in place as soon as possible. Once you have a great resident, focus on tenant retention so you don’t have to face a vacancy every year.
Avoiding Routine Maintenance is Costly
Deferred and unreported repairs will cost you a lot more than you realize.
Don’t put off those minor repairs. Instead, make them right away, even if they seem unimportant. When you take a preventative approach to maintaining your home, you avoid those unexpected emergency repairs.
There will always be maintenance costs, so make sure you have a reserve fund or a savings account set aside for potential repair bills.
Terrible Tenants are Unexpected and Expensive
Have you ever had a bad tenant in your property? It’s not a good experience.
Not only are bad tenants stressful, they’re also expensive. A bad tenant will pay rent late or not at all. A bad tenant will cause property damage and will violate the terms of your lease. You’ll spend more time and money than you want to on evictions, maintenance, and renovations. There may be legal fees, extra cleaning charges, and who knows what else.
Unless you want to spend a lot of money on bad tenants, be sure your screening process is thorough and rigorous. You need to comply with all fair housing laws, but you can do this while digging into a tenant’s rental history, financial history, and income.
These are just a few of the expenses that can be surprising when you rent out a home. Prepare yourself and budget accordingly. If you need any help, please contact us at Parks Property Management. We’re your best resource for all of your Brentwood property management needs.