Many people invest in real estate to rent out the properties and generate consistent revenue streams. It is a solid investment strategy; however, being a landlord is not as easy as it appears on the surface. There are some intricacies to this occupation, and it would be prudent to learn about the common mistakes made by landlords to avoid suffering losses. These tips can also help out in improving your profit margins.
Here are some common mistakes made by landlords that should be avoided to make a healthy profit from your rental investment:
The illusion of Passive Income
Rental investments is marketed as a source of passive income where the investor does not have to be hands-on. However, this is not true, especially in a country like Pakistan. You do not need to be too involved. However, it would be prudent to oversee things from time to time to ensure they are running smoothly.
Calculate Income and Expense Properly
When you invest in rental properties such as Etihad Town flats, you have to understand and calculate your expected income and expenses with great caution. If this value is not calculated correctly, it will affect your estimated profit margins and, ultimately, your decision of investing in rental property.
Landlord and Tenant Rights
When you rent out a property, do make sure to get it notarized regarding both parties’ rights. For instance, whether or not the tenants can make structural changes to the building and increment in rental payments, i.e. annually, or after 2-years time, etc. Clarifying these things in advance can save you a lot of trouble later on.
Conduct Mandatory Tenant Screening
A lot of effort goes into finding tenants and then having them move into your high-end rental properties such as Etihad Town flats or Union Luxury Apartments etc. So if you become aware of some issues after the fact, all that effort and time would be wasted. So to avoid this nuisance, you must conduct your due diligence beforehand and save yourself from any unnecessary hassle.
Get A Security Deposit From Your Tenants
General practice regarding security deposits for rental properties is collecting two months’ rent as a security deposit. That means the month your tenants move in, and they pay three rents at a time. This is just a precautionary measure to protect your investment against any damages or tenants inability to pay monthly rent down the road. This deposit is generally returned to the tenant or deducted as the last couple of months when the tenants decide to move on.
Never Neglect Property Maintenance
All properties, especially the high-end flats or apartments such as Etihad Town flats, suffer depreciation. Therefore, it would be in your favour to carry out routine maintenance periodically. At the very least, take an up-close look at the property and take care of any maintenance issues. If you put this off until your tenants move out, the one-time expense for maintenance after a long time would be an unnecessary strain on your pocket.
Focus On Retaining Tenants
Whenever a tenant moves out of a rental property, the investor can expect maintenance expenses before the new tenants arrive. In addition, they also have to bear a vacancy period while you search for new tenants. Both of these are a drain on your monetary resources. So logic dictates that you must make an effort to retain your tenants. To that end, there are a few things you can do to retain them, such as stay in touch with your tenants, offering yearly maintenance without them asking, for example, a fresh coat of paint, fixing any damaged or leaky plumbing, etc.
Communicate With Tenants In-Person
Most people have moved on to digital platforms to stay connected, but the value of in-person communication still has its worth. It lets people feel acknowledged and appreciated. So, it would help if you also encouraged open communication with your tenant. It not only makes them feel understood and appreciated but also improves your chances of retaining long-term tenants.
Minding these tips will help you maintain your rental revenue and even boost it, especially for high-end properties such as Etihad Town flatsthat cater nicely to the rental housing demand in today’s lifestyle.