It’s time for Landlord Mistake #6, making poor financial decisions…Financial Fumbles.
Each landlord we serve has their own goals for their rental property.
They want their property to generate monthly income right away.
They want the value of their property to grow over time so they can cash out on the equity.
They want to maintain ownership so they can live in the property at some point.
They want to generate retirement income down the road.
While the overall goal varies, no one really wants to lose money on their property. They want it to produce financial rewards.
A landlord is often emotionally tied to a property in ways that keep them from making sound financial decisions.
Here are some common financial fumbles:
Setting the rent too high or too low. If you set the rent too high, your home will remain vacant longer. Vacancies are costly. If you set the rent too low, you may rent the property quickly, but you lose potential income every month. This adds up! Pro Property Management team knows how to set “just right” rent.
Leasing to a poorly qualified tenant. Yes. I just told you that vacancies are costly. However, you should never accept a poorly qualified tenant just because it’s faster. A poor tenant will be costly too – in time, in money, and in peace of mind. They can damage your property, stop paying rent, require eviction, and more.
Failing to invest in improvements. Sure, your property is in solid shape. Who cares that the kitchen appliances are avocado green? Quality tenants. That’s who. Your property is competing with other comparable properties in your area. Potential (and even existing) tenants will evaluate it based on price, location, amenities and DESIRABILITY. Your home does not have to be fancy, but it should be comfortable and attractive. You should periodically make upgrades that attract the best tenants.
Poor financial planning. Things break. Sometimes EXPENSIVE things break. There will be costs involved in owning your rental property. Feed money into a separate bank account so that you’re prepared when the home needs an air conditioner, a roof, a foundation repair, or ???
Tax accounting practices. Many property owners don’t really know the financial health of their rental property at any given moment because they don’t accurately track expenses. They lose money in tax write offs and may be losing money month over month due to “blind” financial decisions.
How is your property producing for you financially?
Pro Property Management team members are experts in the local rental market. We help our owners make solid, objective financial decisions. While caring for the tenant and the property are 2 of our top priorities, we understand that you, the owner, are our client. We are here to make your investment journey profitable.
You can reach us at (203) 909-6333. We are standing ready to help you as soon as I know you need it!