Becoming a landlord and renting your home out instead of selling it offers a variety of benefits to take advantage of such as short and long term tax advantages, diversification in assets, and the ability to hold onto your property while its value appreciates throughout the years. But without some planning you may end up accruing costs that cut into your profits and decrease tenant satisfaction. Here are four costs to consider, and how you can go about minimizing said costs:
Refrigerators need to perform 24 hours throughout every day of the week, which puts a lot of wear and tear on them and inevitably results in the need for repairs as years go by. According to a survey conducted by Consumer Reports, side-by-side fridges equipped with ice makers are twice as likely to need repairs that top and bottom models that don't incorporate ice makers, so to keep repairs needs to a minimum, install one of the latter options in your rental home.
It's also important to make sure that your fridge as well as all the other major appliances in the kitchen as inspected by a professional for any inconsistencies that need attention before the damage becomes too costly. Refrigerator repair technicians can also perform maintenance such as clean condenser coils and gaskets to ensure proper functioning until the next maintenance and inspection visit.
You can expect the interior paint to fade, chip, and crack as tenants move furniture, hang pictures, and simply live inside the home. Without touching up the paint periodically throughout your tenants' stay, your may end up having to hire a professional to make the place look new again indoors. But you can get around the need for professional services by supplying a couple gallons of paint to your tenants each year so they can do touch-ups themselves. Or better yet, do the painting personally when you show up for home inspections once a year.
If your home is equipped with an air conditioner and heater, you should assume that it will be used by tenants anytime the weather gets a bit uncomfortable outside, and use of your HVAC system all year will more than likely be a reality. To minimize wear and tear as well as avoid costly injuries and reduce the need for air conditioning and heating overall, use spray foam insulation or caulking around all the windows and doors to create extra insulation. Also, install insulation film on all the windows to control indoor temperatures as well as reduce outdoor noise pollution.
When a tenant moves out it can take several weeks to clean the place up and get it ready for new tenants due to accumulated debris in the yard and regular wear and tear within the home. A great way to ensure that you are not left with a mound of garbage to clean up after tenants leave is to include a dumpster rental in the lease that will get delivered during the last week or two during their tenancy.
You can also include basic cleaning supplies, putty to fix holes and chips, and well as a rented carpet cleaner for the floors. Alternatively, find out how much it will cost for a professional service to get the place cleaned up and factor the cost into your tenants' deposit fee so you don't have to pay for all of the cleaning tasks out of pocket.
You may be able to factor your maintenance costs and anticipated repair fees into the rental price of your home before putting it on the market.