While the numbers may (I stress, MAY) work on paper, there’s more to owning rental property than just collecting the rent.
7 Tips for Novice New Orleans Landlords
Things break. A house is a living, breathing thing and, just like with people, stuff stops working sometimes. You’ll need to be prepared to either make repairs yourself very quickly or have a list of really good plumbers, electricians and handyman services to assist you.
Tenants sometimes move out without notice. No matter what the lease says, no matter that they will lose their deposit…there will be some tenants who decide to just up and move. Often when they are past due on the rent.
Tenants may cause damage. Normal wear and tear is to be expected in any house, no matter if it’s owner or tenant occupied. But you need to be prepared for the chance that a tenant (or their pet) may cause damage to the property. Keeping a reserve fund for repairs is very important so you don’t get blind-sided by unexpected expenses.
All houses need maintenance and regular upkeep. You’ll need to budget for annual termite inspections, HVAC cleaning and periodic painting.
Insurance rates are higher for investment properties, so don’t be surprised when the premiums are more than you might have expected.
Taxes are higher for investment properties because there is no homestead exemption.
What happens if the tenant doesn’t pay their rent? If you can’t afford to go a couple of months without someone else paying the note, you can’t afford to be the landlord.