Tuesday, June 21, 2016

3 Major Concerns For Landlords

By owning an investment property you get to enjoy a stable flow of income, which can make it a very profitable business for landlords. However, like any other business, there are also risks involved in investment property business and many landlords and homeowners are unaware of these risks. Here are 3 major risks which every landlord should know about when starting their business.

Missing Out On Rental Income

When you are renting out your home for tenants there is always a risk of loss of rental income. Some tenants might deliberately not pay rent while others may fail due to some difficulties. No matter what trouble landlord faces when a tenant defaults on rent. This can create a major financial burden to the homeowner when there is a mortgage on the house. On the other hand, the house may be uninhabitable for some time due to damage or renovation during which landlords will not get any rent.

To overcome such problems you can get the best value landlord insurance for your home which protects you from the loss of rental income. Before going for the insurance always do a market survey and try to get the best landlord insurance quote from your agent.

Background Of The Tenant

All landlords want good tenants that pay their rent regularly and do not damage the property. However, not all landlords are so lucky. Some tenants might not pay their rent or they can break your furniture or any other building structure or they can create some nuisance which can disturb the neighbours. As a landlord, you should always protect yourself from such problems by having a background check of the potential tenants. Although checking the profile of the tenant might be difficult but it will give you great benefits in the long run.

Economic Uncertainty

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For any business, the situation of the economy plays a big role and the business of investment property is no exception to that. When an economy goes through recession everyone is affected. If your tenant loses his job then he will not be able to pay rent which will reduce your income. Similarly, if you have rented your building to a business, the chances are they will also be affected by the recession and they might go out of business which will affect your rental income.

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