Plan for 6 Rental Property Expenses

Plan for 6 Rental Property Expenses

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Plan for 6 Rental Property ExpensesIn today’s investment world, if you want income, interest rates are too low to generate a decent return.  So let us consider an investment property in Springfield for income. To invest wisely, a good investor not only considers real estate for income but comes up with a plan for 6 rental property expenses.

An investment property is one purchased strictly to generate income. It’s neither your current primary residence nor a vacation home used only by your family. You would purchase an investment property with the intention of either renting it out or renovating it to resell at a profit.

Here are two benefits of investment property:

  • Double the Profit Potential: An investment property offers two opportunities for financial gain: rent that can provide ongoing income, and appreciation that can result in a sizable profit when selling the property. There may also be tax advantages available, depending on your financial profile.
  • Little or No Money Down: Unlike the stock market, you can enter the world of property investment with a relatively small amount of out-of-pocket money. Among your financing options, you’ll find loans requiring little or no money down, which is called leverage. There are even options that let you use the equity from your current home to purchase your investment property. That leaves your liquid cash assets available for other investment opportunities.

Plan for 6 Rental Property Expenses

  1. Exterior Maintenance. You might not care what your properties look like if you aren’t living there but the city or homeowners association will. That means hefty fines and penalties if not maintained to code.  You will attract more tenants and higher rents if you budget for exterior maintenance.
  2. So many investors forget to plan for 6 rental property expenses like appliances. When appliances go bad, it can come as a big and nasty surprise right at the wrong moment. Set up a reserve account for rental expenses and contribute to the account monthly. Some real estate investing pros have found investing in a home warranty plan the best move.
  3. Re-Leasing. Despite the best screening in the world things happen, and tenants leave, sometimes a lot sooner than planned. Plan for repairs and redecorating as well as marketing and sometimes commissions too.
  4. Professional Property Management. You may start off wanting to manage your rental properties. At some point, you may not have time to manage your properties. You may decide to hire a property manager. Make sure you have budgeted enough room to hire someone else later on.
  5. Taxes and Insurance. Plan for increasing taxes and insurance. Voters are always voting for bond measures to increase property taxes, and insurance costs inevitably rise.
  6. Legal Fees. You need a good attorney and good legal advice for owning rental property. Hiring a good attorneyis far from cheap, so make sure to have some budget saved up specifically for this cause.

Obsidian Home Solutions is the areas’ premier real estate solutions company.

Since our inception, we have been helping homeowners along with improving communities in every city in which we work.

We have extensive knowledge of the business, a network of resources, and years of expertise.  Obsidian Home Solutions can assist homeowners with a wide variety of real estate problems. We pride ourselves on our reputation for working one-on-one with each customer to handle their situations.

Call us today at 571-348-4338

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