Owning investment property doesn’t guarantee you will become rich or successful. It is good to be hopeful but it is also a must to be more prepared. In property investing, there are many things you need to know. Knowing the good, the bad, the risks, and the weighs is important so that you run the business with your eyes wide open. Investing in property is not always sunshine and rainbow. There are risks and challenges you need to take into consideration before making any decision. Remember that property business is not merely about what you expect but also how the reality works.
Things you need to prepare in owning property investment
Smart, successful investors always think positively but prepare for the worst. That how they can thrive the business no matter what the situation they face in. if you are only ready for the good part, you won’t be able to survive in the industry especially because the competition cannot be taken lightly. So here are things you need to know about owning investment property and how you can be more prepared:
- One of the most important point of investment property is the cash flow. It should be maintained to be positive. The reality is, it can turn negative very quick. The key for this case is maintenance. What you need to do to your property is to gain more income that it costs. The thing is, there is always possibility for the unexpected which can cost you a lot even if you have steady income from your investment property. Thus, you need to have your finance set thoroughly and save the income for the emergencies.
- It is relatively easy for your property to suffer from vacancy. This is more common than you think. Even if you own properties located in a high-demand markets, vacancies are not rare. Letting your property to be vacant for too long is bad. Thus, it is recommended to not list it for rent during low-demand periods. You can try setting the structure of leases to be due for renewal in January so it is possible to get tenants.
- There is high possibility for your property to be damaged due to various circumstances such as flood, fire, or malicious activity of tenants. The risk is high and serious damage sometimes cannot be avoided. It can also happen anytime when you least expect it. The solution for this reality is to have landlord’s insurance or building insurance that will cover this issue if it happens.
- Another reality you should face regarding to investment property ownership is that you may get crappy or rude tenants who don’t respect your property investment. It is important to do the screening to avoid having crappy and irresponsible tenants. To protect your investment, you need to have landlord’s insurance or building insurance. It is also important to state the rules legally about the lease so your tenants don’t have any option but following the rules and respect your investment.
