As a rental property owner, many advantages come with having a property investment. Provided that your property is in a good location and there is demand, you are assured of a consistent income stream, long-term value appreciation, and several tax advantages.
The property industry, like any other, is one that balloons and ebbs in a cyclical manner. You might find yourself at 80% or even 70% occupancy levels. Dealing with a vacant unit is not the ideal situation but it is one that you must be ready for as a rental property owner.
While you might have accounted for the financial challenges that come with having a vacant unit, there are other risks that you should be concerned with. In this article, the team from Keyrenter Richmond details some of the risks that you should keep an eye out for.
Loss of Income
The first and sure risk that you face is the loss of income. A vacant rental unit translates to lost rental income every month. This can have a significant impact on a person who is paying off a mortgage and requires consistent flow every month. Should you lack a financial backup plan, this can leave quite an impact.
You should ask yourself why you have vacant units. Assess your rental rate pricing against that of your competitors. It might be that you are priced slightly higher than normal. In addition, you should start building an emergency fund that can meet your property expenses during these uncertain times.
The Risk of Squatters
While you have gone through the effort of securing a property investment and securing your future, there might be some who want to take advantage. These people are known as squatters. These unauthorized occupants pose a risk to the safety of your other tenants and also some legal risks.
Squatters tend to do illegal activities such as smoking illegal substances and lighting open fires. This poses a danger should the fires get out of control and burn the whole house down. Your other tenants might be in danger. Furthermore, should the squatters stay on the property for long, they could gain some level of protection under the law.
Should your property be vacant, ensure that you have secured the premises with some heavy locks. It would also serve you well if you could make regular visits, inspecting for signs of entry and occupancy on the property. If you identify any squatters, work with the police and legal representatives to remove them from the premises.
Vandalism and Property Damage
Occupancy of a unit serves as a good deterrent to malicious persons who might want to vandalize your property. Some people are always looking to get a quick buck by stealing electrical wiring, plumbing fittings, and other fixtures that they would resell.
If you have some money set aside, you could consider setting up alarm systems and CCTV cameras. While they might look like a small investment, these petty thieves are typically afraid of getting spotted.
A long-term solution to this is to bring in a property management company like Keyrenter Richmond. They would be able to dedicate personnel to cater to the needs of your property at all times of day or night.
Property Depreciation
Investors put their resources into real estate because of the appreciation that it promises them over time. However, this is not the case during long periods of vacancy. Vacancy increases the probability of neglect and abandonment from the property owner since earnings have significantly reduced over time.
With reduced income and the lack of aesthetic appeal, the value of the property is bound to decline. To maintain property value, the appeal of the property must be maintained. You should maintain the exterior and interior.
If possible, invest some more in terms of fittings and fixtures. Do some research on new developments in the area and see what you can upgrade on your property to stay competitive.
Liability Risks
Choosing to rent out your property comes with some level of liability. You will be accountable and liable for accidents and injuries that occur on the property. And what about when the premises are vacant? People who gain unauthorized access might still have an argument in cases of slip-and-fall accidents.
How do you reduce your liability as a landlord in such a scenario? The first step will be to implement measures that reduce the occurrence of said accidents. Secure any hazardous area, make changes to risky fittings, as well as post signs in common areas. Also, you should have in place a substantial insurance cover.
Nothing beats experience and expertise in these technical matters. We recommend that you get in touch with an expert property management company like Keyrenter Richmond that understands the challenges of rental management. They would be able to advise you accordingly in a manner that will reduce your liability in the long run.
Conclusion
Property maintenance, rent collection, and comprehensive tenant screening are not the only concerns that you should have as a rental property owner. Proper management of your assets requires that you be ready to tackle anything.
Property management requires a person or an entity with management experience and technical expertise. For the management of your home, consider getting in touch with the experts at Keyrenter Richmond.
We are the property experts relied upon to remove the risk from leasing of your investment. Our experienced team has the experience, expertise, and diligence to ensure that all systems on your property are efficient and working as they should.
Get in touch with us to learn more about our proven practices and processes.