Short-term real estate investments sound pretty great on paper, don’t they? Buy a property in an ideal location, rent it to qualified tenants, and use it as a vehicle for glorious cash flow.
You don’t have to be a genius to know that it takes a bit more than that.
Over the past decade, real estate has become increasingly dynamic. In addition to being forced to adapt to a connected, networked world, property owners must account for the ever-changing forces of globalization, technology, urbanization, and demography.
These days, real estate is complicated. To help first-timers and veterans alike, here are three things that landlords should expect when owning short-term rentals.
1) Remodels & Repairs
For many first-time buyers, the actual purchase of a property is only the first step. In order to get an accurate expense estimate, consider the additional costs of remodels and repairs—especially if you buy an outdated, or damaged home.
Foundational damage or electrical problems can cost thousands of dollars. However, even if you buy a property in good condition, you may have to drop more money to get it inspected and up to code, as many states have strict requirements for rental properties.
As far as repairs go, all landlords—no matter the situation—should be prepared to shell out some serious cash. In fact, if you aren’t prepared to pay for ongoing repairs, you shouldn’t purchase a residential unit in the first place.
Unexpected repairs tend to creep up at the worst times. And landlord and tenant laws require that you respond to serious repairs quickly. If you ignore requests, you could be held liable for additional damages.
2) Late Rental Payments
It’s true: good tenants are worth their weight in gold. From keeping the yard clean to taking care of your property, the best renters are worth holding on to. However, as any veteran landlord will tell you, the best tenants are those that pay rent on time—month after month.
Sometimes, directly confronting tenants who consistently miss rent payments can help alleviate the situation. It’s up to you to play good cop or bad cop. Although it’s generally not smart to reinforce a tenants’ bad habits or exacerbate an already toxic situation.
Listing your property with short-term housing solution providers turns your occupant’s employers into your clients. This not only increases accountability for your renters, it ensures that rent is paid on time, every time.
Why rely on individual traveling professionals to pay their bills when you can deal directly with a dedicated, reliable team to take matters into their own hands?
3) Problematic Tenants
Unfortunately, not every tenant is ideal. And in today’s saturated rental market, finding the good ones can be a guessing game at best.
While we wouldn’t wish an eviction on anyone, it’s important to know that they do happen. If they do, knowing your state’s landlord and tenant laws can help prepare you in advance. Be aware that evictions are usually extremely costly and time-consuming.
Rather than dealing with the stresses and costs associated evictions, outsource your housing needs to a dedicated housing management company. In addition to managing evictions, Travelers Haven signs leases, coordinates maintenance and change requests, and oversees all vacancies—ensuring that rent is accounted for, and your rooms are filled.