There’s a significant psychological difference that kicks-in regarding spending money on overall house maintenance when you’re living in your home versus when you’re a landlord. Landlords have a natural tendency to not spend too much money on a place that is going to be rented. In return, many landlords only get the bare minimum things done.
The problem with this is that genuinely spending money on a rental property pays better dividends in the long run. It’s never too late to do the right thing. Following is a quick guide reviewing all the things you shouldn’t be doing as a landlord in order to live a more stress-free and wealthy life.
1. Ignoring maintenance
Remember the old proverb, ‘A stitch in time saves nine?’ Ignoring small maintenance issues is one of the most common mistakes most landlords make. Whether a clogged kitchen drain or a small crack in your window, make sure all issues are dealt with in a timely fashion.
Clearing leaves in your courtyard, servicing your air conditioner and other electrical gadgets, and even inspecting the place regularly are some of the essential activities that a landlord should undertake. You never know when small issues will turn into a major problem and become a great expense!
2. Keeping funds for emergencies
Keep in mind emergencies do not come with a warning. Thus, while you invest in different luxurious goods to set up your house, you should also have a separate emergency fund. The emergency funds help you to renovate your house or carry out emergency repairs whenever necessary.
It is suggested that you save up your finances to buy other items instead of compromising your emergency fund. Learn to rank your necessities according to your income!
3. Buying an affordable house
Who wouldn’t want to have a spacious house with a beautiful terrace garden, a swimming pool, and large French windows? Of course, such luxuries satisfy fantasies many landlords have of tenants willing to spend lucrative rent to stay at a place with such luxuries. However, your investment or responsibilities do not end with buying the house alone. Thus, you should weigh whether you can afford the maintenance of the house before going for a luxurious venture.
Many landlords fail to weigh affordability against the maintenance of their house. As a result, they might end up having a dilapidated house in a few years owing to the lack of funds for adequate repair, maintenance, and renovation. Remember, it’s not just about your income but also about the amount of time you have to look after your house.
4. Splurging on furnishing
Landlords sometimes end up spending too much money on expensive furnishings in order to increase the price of the rental property. However, in many cases, especially in the case of families, people don’t want someone else’s chosen furniture. Yes, purchasing expensive furnishings can give you the financial muscle to increase a property’s rent, but it can backfire if you end up spending money on things that are not actually needed.
Therefore, it is not advisable to cram the rooms with unnecessary items. Simply provide basic furniture that your tenants would need.
5. Taking note of the property line
Property lines might not always be where they appear, and it could create issues if you overstep the real line. The real property line might be a few yards smaller or larger or even run in a different direction than what you think. It is always better to get official information from the city surveyor if you are planning to expand your garden or plant trees along the boundaries of your property. It is also a smart idea to consult with your neighbors to avoid an issue or misunderstanding.
6. Get your home insured
Landlords must always make sure to have their homes insured. Home insurance helps to protect your belongings and the house overall by providing you a financial cover in case of emergencies. If there was a fire in your house and most of your furniture was burned, would you have the funds to re-furnish the home once again?
Insurance coverage depends on the kind of insurance policy you choose along with the premium and deductible you choose to pay. Lemonade offers homeowners insurance, and also provides helpful articles and guides to take you through the ins-and-outs of different policies. Be sure to do your research, so you can be confident that you’re choosing the right homeowners insurance policy for you.
Being a landlord is surely a lot of responsibility, but there are simple steps that you can take to make life easier for yourself. Avoiding common mistakes coupled with shrewd investments can go a long way!