Owning a rental property is a great way to earn passive income and build wealth over time. However, it’s a big responsibility with its own risks requiring a lot of work, time, and money. Being a landlord isn’t easy, and there are definitely will be challenges and unpredictable problems that come with owning a rental property. Let’s take on the three of the most common challenges that landlords have to deal with and how to overcome them.
Property Maintenance
One of the biggest challenges of owning a rental property is keeping it maintained. When you’re a landlord, you’re responsible for keeping your property in good condition and that any repairs are made. These can be really annoying, time-consuming, and very expensive.
The best solution is to establish a maintenance schedule for the property. Regular inspections can help identify small issues before they turn into bigger problems. It is also a good idea to set aside a portion of the rental income for unexpected repairs. This can help alleviate financial stress when unexpected repairs arise.
Having reliable contractors to handle repairs and maintenance tasks can save time and money in the long run. Create a list of contractors on hand including a reputable plumber and electrician.
Also, if possible, keep some of the wall paint on hand or at least the exact brand and color so you can do any touch ups.
Tenant Issues
Another unfortunate challenge that landlords face is issues with the tenants. This can include late rent payments, property damage, and disputes with neighbors. These issues can be stressful and time-consuming to resolve.
It’s important to establish clear expectations and boundaries with tenants. This can include setting up a clear rental agreement that outlines the expectations for rent payments, property maintenance, and behavior. Additionally, it is important to respond quickly to tenant complaints and concerns. This can help prevent small issues from turning into bigger problems. Communicating with tenants in a professional and respectful manner can also help prevent conflicts and disputes.
Make sure new tenants are aware of some basic information:
- Where to find the water shut off
- Where to find the kitchen fire extinguisher (you have one, right?)
- Where the fuse panel is, and how to reset a fuse
- When to use a bathroom fan to prevent mold
Legal Issues
Owning a rental property can also come with legal challenges. Landlords must comply with federal, provincial/state, and local laws regarding housing discrimination, safety requirements, and eviction process. Failure to comply with these laws can result in legal consequences, so it’s best to be aware of the regulations.
It’s important to educate yourself on the laws that apply to your rental property. Consider connecting with a legal professional to make sure you’re in following all applicable laws. Also it’s important to keep accurate records of all interactions with tenants, including rent payments and maintenance requests. This can help protect you in case of any legal dispute.
Conclusion
Owning a rental property can be a great way to earn passive income and build wealth over time. However, it is important to be aware of the challenges and unexpected problems that come with being a landlord. By establishing a maintenance schedule, setting clear expectations with tenants, hiring reliable contractors, communicating professionally with tenants, educating yourself on legal requirements, and keeping accurate records, you can reduce the impact of these challenges. While it may require some work and effort, owning a rental property can be a rewarding experience that can provide financial stability.
