If you’re wondering if it’s a smart move to buy properties and rent them out, you should first consider the costs. It’s not just the cost of purchasing the properties that you would be thinking about. You also need to take into consideration the maintenance of the buildings, if you plan on renting out units in a high-rise, or the houses and yards if you’re investing in stand-alone homes.
You don’t have to think about the other part of finding possible tenants yet. You don’t even have to do it yourself as you could hire an online real estate broker‘s services.
The news of landlords’ problems during the lockdowns due to Covid19 should also inform you about the possibilities of what could happen if a similar problem occurs in the future. Not only do they need to pay for their mortgage on the buildings, but they also have to pay for the utilities even if the building is half empty. To make sure you know, you have to pay for these expenses even when you don’t have tenants. Now, let’s go to what you need to monitor, repair, and pay for constantly.
Electrical plugs, sockets, and wires could deteriorate over time. Occurrences like flooding could also damage them. You have to check them as they could result in fires. It would be best if you also replaced bulbs and other lighting fixtures. These have a lifespan so be financially prepared to replace them from time to time.
Speaking of fires, you have to replace your extinguishers before their expiration. So think about it as a regular cost. You also need to check the fire exits. See if the ladders are still working and wouldn’t pose a danger at the time when they’re used.
Water, Plumbing, and Drainage Maintenance
Another constant expense would be your water supply and water accumulation control in and around the property. Pipes could leak even when no one’s using the property due to the varying water pressure. They could also freeze in winter, thaw in spring and summer. Even if you bought the sturdiest pipes, the natural occurrences could loosen your pipes’ joints and lead to leaking.
Drainage has to be checked regularly and cleared of debris accumulation. You also need to check this when there are construction works nearby as their drainage system might affect the one on your property.
Ideally, it would be best if you were mindful of your buildings’ temperature even when you have no tenants. That’s because the building itself needs to be protected from the accumulation of moisture. High humidity can cause it. The changing seasons could also lead to moisture buildup, especially in corners that are not reached by the sun. Moisture wrecks a lot of building features. Among these would be the corrosion of metal parts and the reduction of the effect of thermal insulation.
Your system for Heating, Ventilation, and Air Conditioning should also be continuously checked. Again, if there’s a buildup of mold and mildew, it would not work efficiently and cause your bills to rise.
Termite Infestation and Pest Control
Termites are insidious. Unless you keenly look for them, you wouldn’t know they’ve already invaded your wooden posts and planks until they’ve already hollowed it out and you see their tunnels around the wood. Although wood is treated before it is used in construction, the treatment has a lifespan. If wood is your main building material, it is best to regularly apply the treatment against termites even if you haven’t seen a sign of their presence.
It’s not just termites that should make you concerned. Check for rats and other insects, especially if your property has basements and attics, or rooms that are not often accessed. Regularly schedule checks with pest control because like termites, some insects may not be immediately noticeable.
Aside from these, there are other things you have to shell out money for, although not as regularly. To maintain its attraction to possible renters, you have to occasionally repaint your buildings, change tiles, and replace bannisters. Walls, ceilings, and roofs will also need to be changed from time to time.
If you estimate that these costs are lower than what you would earn from renting them out, then go ahead and go into this kind of investment. The bright side to real estate is that the future will continue to have population increases due to new births, and internal and external migrations. And these people would all need a place to live in.