A landlord’s job does not end after renting out the property to a tenant. It rather begins from there as he will now have to look after the repairs and maintenance requests that the tenants would make. Alongside, he also has to make efforts to maintain a healthy relationship with the tenant.
Despite all the regular maintenance you would be doing for your property, certain repairs and other costs always come in unexpected and you need to be prepared to deal with these financially. To be a successful landlord in the long term it requires you to be diligent while handling repairs and maintenance requests of tenants. This not only helps you maintain a cordial relationship with tenants but also helps you upkeep your property in a very good condition. This again, would help you get a well paying tenant in a much shorter time frame.
Some common and unanticipated expenses that you can expect include:
Repair a leaky roof / foundation problems
These problems usually require a considerable outflow.
Breakdown of appliance
Electrical appliances like air-conditioner or furnace is usually uncommon. But whenever it happens, it requires considerable cash and needs to be handled with urgency.
Vacancy costs when there is no tenant occupying your property
Such situations are financially draining as you may have to bear for the mortgage cost as well as other routine costs out of your pocket.
Hence it is important that you save money for such unplanned events. Else, there are likely to be occasions when you may not have enough funds in your hand to handle these requests with the same urgency as would be desired.
There are two ways to deal with this situation
Maintain an emergency fund
A few landlords create an emergency fund out of the monthly rent that they collect. A predetermined proportion of the rental collection is usually set aside for such a fund. The emergency fund is deposited in a bank and is not utilized for anything else but to meet such unanticipated expenses.
Arrange for bank credit
If you are into this business and have faced this situation often you can look to get a line of credit arranged for yourself. This can help you meet such expenses without bothering to always maintain enough cash balance in your account. Usually the cost of credit or the interest rate is quite low and it would never pinch your finances.