Owning rental property is challenging and rewarding. But it’s also not for the feint of heart. 🙂 On the one hand you can get better returns in real estate than you can with many other investment vehicles. On the other hand, just like any investment, there can be great lows to go along with the great highs. How can you avoid the lows?
First, know what you are getting in to. Each rental income range has it’s pluses and minuses. Vacancies can be longer on the higher end but payment, most times, more stable. When empty that’s a harder hit to your wallet. Newer properties require less upkeep/maintenance than older properties but that in turn cuts in to your bottom line on a monthly basis. So many things to think about and trade-off for.
Second, avoid functional obsolescence by keeping your property up to date as the months and years roll by. Little hits here and there keep the property looking better and the tenants happier. Happy tenants don’t leave and probably take care of the investment house better. And in the long run, trust me on this, it’s less expensive.
Lastly, SAVE! Keep a couple thousand in your reserves. Maybe that’s overstating it if you own the rental property free and clear. But if you have a mortgage I would recommend always having access to about $1,500 for any emergency repair (very, very, very seldom will you need that much) and at least 90 days worth of mortgage payments. That should ride out 99% of the storms out there. Don’t have quite that much but itching to pull the trigger? Delay. My best advice to you.