Rental income is passive but can take more time and effort than other forms without professional property management services. It can be tempting to try to go it alone as a landlord. Unfortunately, many challenges come with renting out properties that require specialized knowledge and experience. Hiring a team with the right expertise for the job is an excellent way to mitigate these challenges. Here are some common rental income challenges, along with tips for overcoming them.
- Tenants Who Don’t Pay or Pay Late
Landlords depend on rental income from tenants to cover the cost of their mortgage and earn revenue. So when tenants don’t pay or pay late, it dramatically impacts landlords’ bottom line and causes financial hardship. However, to avoid problems with tenant payments, many landlords hire an outside management company to collect the rent from tenants and ensure they’re paying on time. If you decide to go this route, find out if your agent offers a rent guarantee scheme to protect your investment against losses due to tenant default and other rental inconsistencies.
- High Rate of Vacancies
One of the biggest challenges with rental properties that affect rental income is the rate of vacancies. For example, the vacancy rate for single-family homes is about 8% on average. That means that your property could sit vacant for three weeks or more before you find a renter.
The best way to prevent this is by hiring an experienced property management company with a good reputation and the ability to reduce the number of tenants who change frequently. They can help improve loyalties and affection among current renters, so they stay longer. You will also see that professional management may cost a little more upfront, but it will save you in the long run because of the lack of vacancies.
- Setting the Right Rent
The rent you charge for your property will depend on many factors, including the size, amenities, location, and the market. Your rental income could be higher or lower than what you would expect if you set a rent that is too high or too low than market value. Hence, before deciding on a price, research to get an idea of the going rate in your area. A lower-than-necessary rent may mean you won’t have enough money to cover expenses like repairs.
On the other hand, charging more than others can lead to vacancies when prospective tenants don’t want to pay as much as they think they should. However, professionals in property management often help landlords find a balance between maximizing their profits, setting the proper pricing, and finding good tenants who can afford their prices. They can also help with comparative market analysis to develop a competitive level based on its value.
- Spending Money on Unnecessary Conditions
Ensuring that your property is in good condition involves taking care of the existing infrastructure and appliances and repairing things like leaky faucets, broken appliances, or pest infestations. These are not just inconveniences; they can result in a loss of income if a renter decides not to renew the lease because they are tired of waiting for you to fix the issue.
However, you need to ensure that you’ve responsible tenants who know how to take care of their space without unnecessary damage to doors, plumbing, windows, paintwork, etc. A reliable and experienced property management agent can help manage these problems by doing regular inspections and keeping up with general maintenance, so you don’t have to worry about it. That way, you can keep your repair and maintenance costs minimum while ensuring quality living spaces for renters.
- Hassle of Rent Collection
Rental income can be a wonderful thing to have, but it can be a lot of hard work and many challenges. However, a reliable and experienced guaranteed rent agent will lay strategies for dealing with the common challenges and secure a guaranteed rental income during your agreement period. That way, you can enjoy the benefits of passive income while only spending time on tasks that need attention when they arise.
Conclusion
Real estate investing is an excellent way to make passive income, but as with any high-investment venture, there will be challenges. The key to having a consistent rental income without hassle is to consult with a professional guaranteed rent letting agent to help you stabilize your rental income. These professionals will help you to overcome those challenges and enjoy the benefits of a guaranteed rental income. It’s not always easy being a landlord, but it can be advantageous with the right professional!
