ExecutiveChronicles.com | Most Common Real Estate Investment Dramas And How To Solve Them | Investing in real estate is a solid plan for improving both your current and future financial stability. Property rarely decreases in value, and when rented out, the buildings you own can provide a consistent, passive income, which will give you extra money to play with now while providing a layer of protection should rainy days ever come. Of course, that doesn’t mean property investment is without its pitfalls. As with any investment, drama can arise easily if the situation isn’t correctly managed. With this in mind, here are the four most common real estate investment dramas and how to solve them:
Most of us could probably benefit from improving our organizational skills, but when big-ticket items like property are part of the picture, keeping things tight is key. Make sure you’ve done your research and that you find a reputable commercial real estate agent before you even think about investing. This will ensure that your initial purchase and set-up will go smoothly, but it also provides a much better structure for the management of your investment moving forward.
Not Looking Into Your Tenants Thoroughly
Although your property is about to become the home of their business, it’s still your asset, and as such, it requires careful protection. The amount of landlords who fail to perform adequate background checks is astonishing, and trust us when we say you don’t want to join their ranks. Keep the fact that the tenant is responsible for the care of your property at the front of your mind when choosing between applicants. This can save you a lot of trouble down the road. Blacklists are easy enough to check, but other factors may require a little more digging. If your detective skills aren’t up to the job, enlist expert assistance. You’ll thank us when said experts save your property from less than stellar tenants!
Not Having The Right Contracts In Place
A trap many prospective landlords fall into is rushing through, or completely missing, important documentation and contracts that are crucial to the smooth operation of their new property. This isn’t the kind of situation where you want any grey areas, so it’s important to ensure you have all the correct permits and paperwork before moving any tenants into the property. If you skip this step, you’ll leave yourself open to a world of financial pain.
Missing Key Dates
Your contracts aren’t the only things you need to have in order. Key dates, such as rent reviews and other lease events, should be planned for and clearly marked on your calendar. Even if you don’t intend to make any changes, it is important to stay across what’s happening at your rental property to ensure efficient and effective management. This is even more important if you have multiple properties within your portfolio.
Not Planning For Maintenance And Mishaps
Any building is going to require maintenance from time to time, but a lot of people forget to put money aside for when those times arrive. On top of these regular costs, even the best tenants will have accidents, and fixtures and fittings don’t last forever. Make sure you have a healthy sum set aside for when these issues arise, so you don’t find yourself scrambling to find the funds you need to fix things.
Forewarned is forearmed – keep these mistakes on real estate investment (and how to avoid them) in mind when setting out on your next property adventure. Happy investing!