Many first-time real estate investors plan their budgets considering only the listing price as the cost of investment. However, there are several substantial unexpected costs that you need to know about and prepare for, to make a profitable return on your rental investment (ROI). Here is a list of unexpected costs you will need to take into account if you plan on owning a rental property in either Healdsburg, Windsor, or Cloverdale.
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Emergency Maintenance Expenses
As a landlord, you make provisions for the regular maintenance and repair costs in your budget. However, you may overlook the possibility of emergency maintenance issues that can occur out of the blue. Bursting of pipes, sudden electrical failures due to short circuits, an unexpected breakdown of appliances, property damage due to natural calamities, or vandalism are some examples of the emergency maintenance requirements for which you have to be financially ready.
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Buying Rental Property Insurance
Rental insurance protects your property from accidental and intentional damage by tenants. As a result, managing your property comes at a cost that may be higher than you expect, if you do not consider the costs involved in buying rental property insurance while planning your investment.
There are different types of rental property insurance, and the premiums vary for each. It may be as high as 25% or more for landlords, based on the type of policy and location of the property, and what is insured under your insurance coverage.
Talk to a local insurer or an experienced Healdsburg property manager before purchasing rental property insurance. They can help you decide the right policy based on your rental needs and investment goals.
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Utilities And Essentials for Your Rental Home
Whenever you plan to rent out your house, you will need to invest in buying home essentials for increasing the tenants’ convenience. Some primary items include a cooking range, appliances, toiletries, furniture, and bedding. You may also be required to pay the utility bills depending on the size of the home, the number of tenants, and the location of the property. These costs may or may not be a part of your responsibility, depending on the clauses you add to your lease agreement, but it is better to be aware of them in any case.
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Legal Expenses
Legal expenses are associated with the costs incurred by landlords when they opt for the professional services of an attorney. This can range from standard fees for drafting lease agreements, eviction policies, custom rental clauses, and more, to additional expenses in case of litigation costs and legal representation in court.
As a landlord, you may occasionally have to deal with evictions, send notices regarding payments, lease renewals, utility bills, and even defend yourself in court if your tenants sue you. This leads to additional, unexpected legal costs, for which you need to be ready.
Having an idea of these unexpected costs can help you avoid nasty surprises and have a financial backup plan to deal with the expenses. Alternatively, you can avoid the nasty-surprises route altogether by working with a trusted rental management company like Healdsburg Property Management.
We manage single-family homes, duplexes, four-plexes, and multi-unit properties of up to seven units in Healdsburg and can help you with extensive tenant screening, preventative maintenance, and ideal tenant placement so you never have to deal with unwelcome unexpected costs. Healdsburg Property Management currently serves Sonoma County’s Wine Country, including Healdsburg, Windsor, Northern Santa Rosa, Cloverdale, and Forestville.
Connect with us to identify and prepare for managing unexpected costs of your Healdsburg property.