4 Things You MUST Know as a Property Investor
There are some key things you need to know as a property investor, whether your investment properties you’re enjoying continuous positive cash flow, or you’re hoping to harness the long-term capital growth in your property to fuel your wealth-building. If you’re not aware of these factors, you may face unexpected challenges and costs, which influence your investment. Continue reading to learn the most important things you should know as a property investor so you don’t run into any unforeseen problems along the way.
1. Landlord’s insurance is a smart investment
It makes sense to protect your investment property because it is likely one of your most valuable possessions. While landlord’s insurance isn’t required, it’s a good idea to have one that covers you for things like water damage, plumbing problems, and if a tenant intentionally damages your property. If your renter vacates unexpectedly or stops paying rent, some policies will protect you from the loss of rental income.
2. Budget for ongoing costs when you buy
You’ve likely calculated your mortgage payments and gotten pre-approval for a loan, but have you considered the ongoing expenditures of owning an investment property? Property tax, repairs, utility bills when vacant, ongoing maintenance should all be factored into your budget.
3. Keep up to date with regulation changes
Tenant laws are continually changing in our state. With the growing number of renters in the community, there is a general trend for legislation to change to be more tenant-friendly. For example, source of income is now a protected class. This means you may not be able to deny someone who uses funds from Section 8 to pay rent. With changes like this growing increasingly regular, it’s more vital than ever to find good tenants who will not only look after your investment but also does their best to make sure the rent gets paid.
4. Make sure your property is safe
Did you know that in January 2023 all properties with stairs must be inspected by an approved vendor to certify the stairs are safe? Your property manager should keep you updated on legislation to make sure you’re in compliance at all times.
Having an investment property is rewarding in many ways, but you need to make sure you’re aware of your upfront and ongoing costs and potential risks. Factor in the items above for your current properties and future purchases to proactively manage your expenses, address problems, and stay on track with your wealth-building goals.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.