By Paul Branton, Director of Investor Services for Home Rental Services
I am a firm believer that there are simply not enough good surprises in life. I’m still working to convince my wife and kids of this truth. They seem to have grown a little tired of my constantly choosing to keep things (even little things) a secret, but I continue to tell them: “Life is full of plenty of surprises…. just not enough good ones!”
Savoring the Surprises
This is why I was adamant when we had our first child that I DID NOT want to know the gender until our baby was born. (This is arguably the BEST SURPRISE of my life!) This is why when we had all three of our children, we didn’t share the names with anyone until they arrived. This is why when we leave to go places, I will often tell my family “let’s go on an adventure” and they don’t know the destination until we arrive. This is why 9 times out of 10, if the restaurant has a “daily special” I will order it… and 85% of the time it ends up as a “good” surprise. :)
Perhaps my decision to work in property management has me trying to compensate a bit as we get daily surprises. Sometimes, this results in “bad news” for our client. One such surprise occurred recently and it had me thinking about whether or not it should have come as a surprise, or if it could have been avoided. I came to the conclusion that it could have been avoided (and likely should have been avoided.) So, while I REALLY LIKE good surprises, I equally enjoy not having the “bad” ones. With that in mind, I want to share with you:
3 Rental Property Surprises… That You Can Avoid
1) Month-to-Month Leases
Don’t let your lease go month-to-month. It’s about as simple as that. Start with a term lease and renew for a term. This keeps you from getting a 30-day notice to vacate when you least expect it… like winter time in Kansas City.
2) Unplanned Expenses
Go ahead and PLAN FOR EXPENSES. They will arise no matter if you plan for them or not, but it’s much less stressful when you’ve planned appropriately. Have a separate bank account for your investment properties. Set aside at least one month’s worth of rent each year as a reserve fund. This comes in very handy when the tenant stays for eight years and the home requires new paint, flooring etc. when they leave. It’s also nice to have access to a reserve fund when the hot water tank, furnace or central air conditioner dies and needs replacement.
3) Insurance: Make sure you have the proper coverage
Meet with your insurance agent annually to discuss any changes in the amounts and types of insurance coverage you are carrying. Has your property value increased? Do you need more liability coverage? Do you have water/sewer backup coverage? Are your deductibles a reasonable amount for your budget?
At the end of the day, we know that life will bring us all kinds of surprises. How we choose to respond makes all the difference in our journey (and for those around us during the peaks and valleys.)
If you need help navigating the pitfalls of property management, we would love to help!
Wishing you a wonderful holiday season and may your good surprises always outweigh the bad!