Common Mistakes Made By Investment Property Owners
Owning a rental property can build the asset column, increase cash flow and enhance monthly income. However, people often get caught up in the euphoria of owning an investment property and decide to manage it themselves. They don’t realize that there are major responsibilities that come with owning a multi-unit property.
If owners are unprepared for some of the surprises, they could be carrying a negative asset, which would leave them financially strapped. In addition, if they’re not sound investors, it could result in a forced sale.
So, to help you avoid some basic errors that could prove to be costly, Apartment Pros has put together a list of the most common mistakes made by investment property owners.
1. Not anticipating building costs
Contingencies for building deficiencies need to be planned in advance as there are always unexpected costs. Occasionally, old pipes will need replacing, the balcony repaired, or the HVAC system will require an upgrade.
2. Underestimating the cost of a vacant unit.
When no tenant is staying in the building, there are still many costs to be paid, including the mortgage and maintenance fees. It can prove expensive when there is no monthly rent flowing into the bank. Therefore, an emergency fund is necessary.
3. Ignoring maintenance responsibilities.
Every week, there needs to be maintenance carried out on the property, including cleaning and garbage disposal. If these jobs are not taken care of promptly, it could lead to reduced hygiene levels.
4. Neglecting repairs
It’s imperative to carry out repairs when they occur. If the issues get neglected, they will worsen, resulting in more extensive repairs needed in the future. These unnecessary expenses could get avoided by being proactive.
5. Not respecting tenants
It’s essential to respect tenants as they will be more likely to treat the property with care. Therefore, if a property owner wants to increase the rent or inspect their apartment, they should give sufficient notice to the tenant.
6. Ignoring local laws
It’s essential to keep in good standing with the city’s bylaws and regulations. It can include carrying out annual fire inspections for the property. These procedures are crucial to keep the tenant safe and protect the property from damage.
To avoid these and other mistakes, reach out to the experts at Apartment Pros. As a full-service multi-residential real estate agency in Midtown Toronto, we advise clients on the long-term impact of owning a property. It includes going through the criteria to follow when acquiring property and helping them set up a monthly/ quarterly checklist of maintenance requirements.
Our services include guiding landlords with leases, property management, legal/ financial advice, and mortgage broker support. We also offer construction/ renovation management and facilitate buying and selling of investment properties.
We serve clients across Lakeshore, Midtown Toronto, Leaside, Mimico, The Annex, High Park, Toronto, and the Greater Toronto Area.
For a complete list of our services, please click here. If you have any questions about real estate, we’d love to hear from you. Please get in touch with us here.