Property Investing: Don’t Get Caught by the Hidden Costs
When looking for a sound investment property, Rochester NY could be the answer. But it’s important to be aware of the hidden costs of being a landlord.
(firmenpresse) - In the thriving city of Rochester, NY, the rental market is booming. It is an ideal time to consider investing in the buy-to-let market, with a steady (and increasing) stream of qualified, quality tenants looking to move to the city to live and work. When it comes to a rental investment property, Rochester NY is appealing even to the first-time investor – but it can be a minefield if you aren’t aware of the hidden costs associated with being a landlord.
The first step is to employ the services of a reputable property manager to help guide you through the legal, financial and practical aspects. They act as your representative, taking care of compliance issues, maintenance, rent collection, and any other enquiries from tenants or authorities. In terms of an investment property, Rochester NY’s affordability, liveability, and growth makes it an excellent proposition, but you still need to understand the realities so you don’t get caught short.
The Cost of Vacancies
Remember: even if a house or apartment is empty you’ll still be liable for outgoings like utility bills, taxes and, of course, the mortgage. All these costs can eat into your profits, so it’s vital to have a contingency fund to cover them and not just rely on the rental income. A good property manager will mitigate against the risk of vacancies, but life happens, and even a reliable long-term tenancy can go wrong. Back-to-back leasing is not a guarantee, and in addition to running costs, finding a new tenant requires advertising, photography and credit checks. If you have to make up for these costs from your own pocket, you could find yourself in financial
difficulties.
The Cost of Renovation, Maintenance and Emergencies
To attract and keep quality tenants, regular maintenance is required to ensure your investment is kept in good repair and appliances are in working order. You’ll also need to carry out annual gas, fire, and electrical safety checks. This all costs money, so you need an agreed budget with your property manager. Making capital improvements over time is inevitable, so you’ll also need a budget to carry out roofing, painting, and the replacement of appliances.
In addition, emergencies can and do happen. Leaky pipes, structural issues, or electrical faults need urgent attention as and when they happen, so you should set aside an amount every month for unexpected eventualities, and maintain this in positive cash flow. This is not something to scrimp on or think “it won’t happen to me”, because you can face potential litigation for any injury or damage to personal belongings caused by negligence as a landlord.
The Cost of Legals
Sometimes irrevocable issues arise with a tenant and you need to evict them, resulting in legal expenses. While your property manager may be able to handle it, in some cases you may need to pay for legal representation to protect your investment property. Rochester NY has local legislation in place to protect both landlords and tenants, but the process comes at a cost. Your insurance may not always cover them, so it’s important to have money set aside to cover the possibility of a worst-case scenario where you don’t receive an income from the property for a period of time.
It’s important that you choose the right location for your investment property. Rochester, NY’s credentials indicate that it’s a low-risk high-reward area in terms of capital appreciation, so it’s an ideal choice for new investors. But while it can be a lucrative passive income stream, it certainly isn’t a “set and forget” proposition. In order to avoid unexpected expenses adversely affecting your profits, hire a local property management company to guide you, set your budgets, and allocate funds to cover all eventualities.
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Danny Torres is from Torres Turn Key, a property management company in Rochester NY with more than ten years’ experience dealing with both domestic and international investors. If you’re considering an investment property, Rochester NY based Torres Turn Key provides a holistic service for both commercial and residential properties. The company brings together a host of experience and specialist knowledge to build long-term relationships and create maximum value and benefit for their
customers.
Datum: 31.07.2024 - 10:46 Uhr
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