Hello World! Welcome Friends! Thinking about purchasing a rental property? There can be many rewards when making this type of investment, but there can also be many risks. Things like an added income stream, a place to escape to, an investment for you or your family’s future, and whatever other benefits that apply to your situation can all be bonuses when it comes to placing your bet on purchasing a rental property. However, those same things may all be at risk if you don’t consider several important factors.
Short-Term vs Long-Term Rentals
You should know before purchasing a property just what you plan to do with it. Is it a destination for you and your family to go on frequent escapes from the city? Or perhaps it’s something close by that you can manage and lease to a local student or family for an extended period. Either way, you’ll want to think about the time cost and the management cost that can come along with each choice.
Becoming a landlord may not be something you’re ready for, but when leasing out a home long-term, you become just that. Unless you hire a property management company to do the dirty work (literally) for you, you’ll be responsible for home repairs like backed-up plumbing systems, roof leaks, tenant issues, missed payments, and collections if the tenant defaults on their rent. You need to consider if that is something you’re ready for.
Wear and tear on a short-term rental can be less than that of a long-term rental, but it does still come with its unique challenges and advantages. One of the best things about a short-term option is that you can manage the price of your listing on a more fluid level, adjusting your listing price based on season, demand, day of the week, etc, which is not something you could do in the middle of a lease agreement.
Similar to long-term rentals, the time cost for managing a short-term rental can be expensive. Managing this type of property, particularly one you plan to use and visit, can be complicated when it comes to booking, scheduling, and most importantly these days, cleaning and disinfection. As the homeowner, you’ll be responsible for organizing all of these tasks, sourcing local companies to assist, and managing it all for each of your renters. However, different types of vacation rental software can help ease the headache of scheduling and maintenance—as well as boosting your bookings.
Signs of Pests
Whether they are creepy, crawly or just a plain ole’ critter, no homeowner wants to see signs of an infestation or evidence of animal damage. Critters and pests can range from cockroaches and ants to squirrels, raccoons, and even woodpeckers! Nearly every type of these insects or animals can cause damage to the home.
- Signs of insects – Warning signs of insects in a home you’re looking to purchase can include things like droppings, living and dead insects, and damaged plants. Be on the lookout for holes or other marks in wood furniture or decking, as this can also be a major sign of a termite infestation—a costly repair and removal.
- Signs of a woodpecker problem – If the incessant drumming of a woodpecker’s beak against the side of your home isn’t your first clue, look for signs of woodpecker damage by inspecting for small holes in the siding. Oftentimes those pesky peckers might be storing food or even eating insects right in the exterior walls of your home.
- Signs of squirrels and raccoons – If you’ve never experienced the sounds of scurrying feet in a ceiling or air duct above you, you may not be familiar with what a squirrel or raccoon infestation can sound like. In addition to the pitter-patter of tiny footpads running across your ceiling, you should also keep an eye out for droppings, scratch marks, and tracks in or around your lot.
Natural Disasters
It can be tempting to go after homes that may be a “better deal” because of the price, even if they have a few cosmetic flaws. But you must ensure they are just cosmetic issues. Investing a considerable amount of money into any home, let alone a second home can put your finances in jeopardy if something goes awry.
Every state in the United States has had a natural disaster and therefore the damage that comes along with them. Heavy rain, wind, ice, and other severe weather can make a huge impact on a home’s structural integrity.
Roofs can be expensive to repair, particularly if you’re having to replace entire sections. So if your new rental property is in an area with heavy snow and ice, it would be best to get a roof inspection before signing on the dotted line.
Bottom Line
Ultimately, purchasing a second home or an income property is an exciting step for a potential buyer and while we don’t want to dissuade you from making a purchase, we hope you’ll be on the lookout and do your research about these things before purchasing a rental home.
Click the links below for any posts you have missed:
What Kind of Tiles Do you Use for a Swimming Pool?
Difference Between Male And Female Perfumes
Changes you Can Make for an Eco-Friendly Living
Landscaping Tips To Beautify Your Home
Hiring a Moving Services Company
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Toodles,
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