Hidden Landlord Costs

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Landlords and real estate investors have the potential to make a lot of money with rental properties. However, there are a huge amount of hidden fees and expenses that can quickly offset the amount of profit you can make if you don’t know about them ahead of time. Before you let expenses eat away at your profits, here’s a list to help you adjust your bottom lines ahead of time.

Property costs and expenses – Most real estate investors know they have to purchase the property, but just like your home, you have other costs and expenses you will be responsible for. You will have property taxes due for each property, in addition to utilities.

Maintenance – The upkeep of each property always takes real estate investors by surprise. Just like your home, you will be responsible for replacing any broken and nonfunctioning fixtures, features, and appliances. This is in addition to cleaning, painting, and maintaining the yard as well as the exterior and interior of the home. The best way to do this is to set up a Major Asset Repair Fund where you tuck away extra money every month to save until you need it.

Insurance – It is vitally important that you protect your real estate investment assets. Insurance will cover a large portion of replacing your structure if something should happen to it. You may consider getting an additional liability insurance policy as well. This will keep you from being liable if anything should happen on one of your properties.

Landlord Costs – Depending on the local government, there may be specific licenses you may have to have or specific fines and fees you have to pay. The local business associations, tax assessors, and real estate attorneys should be able to advice you on the local business codes you will need to address.

Taxes – An account or tax professional is a must if you have real estate investment properties. Not only will you owe property taxes and personal income taxes, but you will also have business taxes you will owe every year. A professional will walk you through what you will owe and the steps you can take to get valuable personal and business tax breaks.

These are just a few of the hidden costs that can greatly affect your real estate business bottom line. Getting a handle on them now will help you avoid being short later. For more information on real estate investing, call or visit us Homevestorsfranchise.com. We have a large assortment of real estate investing and real estate franchise opportunities available. Come let us help you grow your real estate investment business.

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