What Are the Drawbacks of Owning a Rental Property?
Owning a rental property not only brings benefits, but it also increased responsibilities and various drawbacks.
You will also need to put aside money for unexpected expenses. These could include major and minor repairs, upgrades to the property, or legal fees. You will need to prepare money in advance to cover the costs.
Repairs and Maintenance: Maintenance and repair costs can be substantial. However, as a landlord, you are responsible for providing safe and decent units for your tenants and must keep the rental unit in good condition. Remember that tenants are not only expecting a house, but also a service. Before renting any unit, you will need to make sure your building complies with all local regulations.
For example, there may be restrictions on renting out a converted attic or basement, even if the prior owner was doing so.
Legal Obligations: It’s crucial that you understand the laws, rules, and regulations that govern rental housing. You may be liable for situations you never even imagined, and ignorance is no excuse in a court of law. Study the laws specific to your state and local area to ensure you understand your legal obligations.
24-Hour Availability: You should always make yourself available in case there’s an emergency. If you know you can’t be available 24 hours a day, appoint someone who can act on your behalf to oversee the property and communicate with tenants. Remember, you are responsible, to a significant extent, for your tenants’ well-being and safety while they are living on your property.
Being a landlord means taking on financial and legal obligations, maintenance and repairs, and the commitment to be available to your tenants 24 hours a day. You need to consider these factors while making the decision.