If you own rental properties, you’re already ahead of the game when it comes to investing your money in diverse areas that will make you money in the long run. You’re probably an individual who likes to be prepared and plans out everything meticulously. You’re also probably an individual that doesn’t like surprises. Just like with anything else in life, owning rental properties comes with unexpected problems, concerns, and other happenings. But there is plenty you can do to plan for these unexpected problems and prepare yourself effectively.
Save for Repairs
While your rental property is there to make you money, it can also be a huge money drain if you’re not careful. Just like any home, different things from the HVAC system to the garbage disposal can break without warning and as the homeowner, you’re responsible. Instead of spending the monthly rent, put any extra money aside into a savings account to save for future repairs or upgrades. Your property is still making you money as it gains in equity, however, it’s best to keep some money readily available for when you need liquid assets to cover repairs.
Don’t Bank on Tenants
When you own a rental property, the one thing that you always have to focus on is having the property occupied. Anytime the property is not occupied, you are losing money. You can’t bank on always having tenants signed to the property or moving timelines matching perfectly. Being financially prepared for a month or two without tenants is important. You can help reduce the time your property sits vacant by working with a reputable property manager to take care of this process for you. You’ll get thoroughly vetted tenants and have a marketing system that is sure to keep tenants occupying your property.
Umbrella Coverage
Owning a rental property opens you up to certain risks. If you own the property, you have certain responsibilities when it comes to insurance and liability. In order to protect yourself, and your personal finances, it’s important to carry the right homeowner’s insurance, the right umbrella policy, and to separate your rental income from your personal finances. Create an LLC to protect yourself and spend the little extra on umbrella liability coverage just in case. We promise it’s worth it.
Professional Property Managers
You may have grand ideas about managing your own rental properties in order to make the most money off of them. That’s great and very admirable. However, it’s hard to plan for everything that might be unexpected. When a pipe bursts in the property at four in the morning, do you really want to get that phone call and have to deal with both frazzled tenants and grumpy contractors? Do you always plan to be around? How about that trip to Mexico you have planned for Christmas? What are your renters going to do if something unexpected happens when you’re out of the country? Working with qualified and professional property managers is one of the best ways to help you plan for the unexpected and mitigate any risks associated with owning rental properties.
For all your property management needs in Central Arkansas, contact Real Property Management Central Arkansas, because we like to plan for the unexpected too!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
