Some dream of owning rental properties and becoming a rental property owner. Others inherit a second home and are faced with the task of figuring out what to do with it. Either way, being a rental property owner can be equal parts rewarding and frustrating.
There are a lot of potential challenges that come with being a landlord. The trick is not to let them discourage you, but to find solutions and make your rental business as profitable as possible.
Common Problems Faced by Rental Property Owners
The obstacles to becoming a successful rental property owner come from many places. Some are financial, some are personal, and some come from your tenants. Some problems stem from simply not having enough hours in the day to do all the jobs a landlord has to do. These are some of the most common:
- Raising Capital. Like any business, owning a rental property requires some startup capital, and raising these funds can be one of the biggest hurdles you have to get over. Whether you are buying a property, doing renovations, or both, it requires some money upfront. Most investors start out by getting a mortgage to finance their first property, and put 20% down to keep their interest low.
- Finding Tenants. Whether you have one unit to fill or a dozen, one of the biggest challenges to being a landlord is finding tenants. And not just any tenants, but quality tenants. Doing so requires some marketing savvy, but it also helps to have a tenant screening process in place to weed out potential problem tenants before they get their foot in the door.
- Maintaining the Property. Routine maintenance is required to keep any property up and running, from winterizing the windows and cleaning the gutters to changing the HVAC filters and cutting the grass. This can take up a lot of your time, especially if you own multiple properties in different neighborhoods. But there are also emergency repairs to consider, and you need to have a nest egg tucked away in case something major like a furnace or hot water tank must be replaced.
- Collecting Rent. Making sure tenants pay rent on time can end up being a full-time job. Most of your tenants will probably give you no trouble, but there’s always the chance you’ll end up with one or two who regularly miss rent payments and need to be reminded.
- Navigating Evictions. Enforcing the terms of the lease is important, but no landlord ever wants to evict a tenant. There’s a simple reason for that: evicting a tenant can be challenging. It’s emotionally draining, and it has the potential to turn into a costly and exhausting legal battle.
- Managing Finances. Bookkeeping doesn’t come naturally to everyone. But keeping track of rent payments, managing vendors, paying taxes and financing repairs all come with the territory. There’s also another financial consideration to always keep in mind: setting aside enough funds that you can get through an extended period of vacancy if you have to.
Find Solutions to Your Rental Property Problems
For every problem there is a solution, and for almost every problem faced by property owners, the solution is the same: hire a professional rental property manager. A great property manager can save the owner time and money, making their business more profitable while allowing them to focus on things that are more important, like investing in more properties.
Contact us today to learn more about how working with a rental property management pro can help you overcome the obstacles that stand between you and a successful rental business.