Kennedy Real Estate Solutions
Kevin and Sharon Kennedy, Kennedy Real Estate SolutionsPhone: (860) 304-4433
Email: [email protected]

What Are the Risks to Rental Property?

by Kevin and Sharon Kennedy 02/26/2020

Photo by 1000Photography via Shutterstock

Investment in real estate rental properties has many upsides. You can make great money long term. But as with any business, there are risks. Before you turn your condo or townhouse into a rental or invest in a house or duplex, consider the ramifications and consult professionals.

Dos and Don’ts:

  • Do set up a legal entity to own your rental properties for you. This may be a Limited Liability Company (LLC), Corporation or Partnership. Don’t hold the property in your own name. This protects you from lawsuits and judgments.
  • Don’t overspend on the property. Don’t overspend on upgrades or refurbishing.
  • Do take care of the major systems such as HVAC, plumbing, electrical, roofs, in-ground sprinklers and garage doors.
  • Do get the property inspected to make sure there is no hidden damage or problems you’ll need to fix.
  • Don’t buy your first rental without looking at it.

Dealing with Tenants

Owning a rental property does not guarantee you’ll have immediate profits. If you go several months unoccupied, you still must pay the mortgage, taxes and insurance. If you don’t know how to go about getting tenants, consider using a property management service. The small monthly fees you pay usually make up for months with no rent or bad renters. 

Another advantage of using a service is that they vet your tenants for you. They run the credit checks and make the phone calls to employers and banks. The only thing worse than no tenant is a bad tenant. Bad tenants damage property, renege on paying their lease payments, and cost you money if you decide to evict them.

Handling Maintenance

As with any home, there’s no actual way to anticipate all the things that could go wrong. Sometimes, one failing system causes problems with other systems. For example, electrical malfunctions can damage the water heater, leading to plumbing failure. A leaky roof might trigger the AC to go out. Don’t run your rental business on a shoestring. Keep funds available to fix anything that goes wrong so that you don’t lose your investment.

If owning rental property is your goal, talk to an experienced real estate professional. They can guide you toward profitable properties, introduce you to property management companies and help you on your way.

About the Author
Author

Kevin and Sharon Kennedy

"A Personalized Approach to all your Real Estate Needs" Sharon and Kevin Kennedy have built Kennedy Real Estate Solutions with the premise of building relationships and finding creative solutions to unique real estate situations, both residential and commercial. The Kennedy’s work with their clients with the intent of getting a full understanding of the client’s current situation and desired real estate goals. With this understanding and the knowledge that has been acquired from over 50-years of real estate experience, Sharon and Kevin offer guidance and advice best suited for the individual client. Buying and selling a home can be an emotional and trying time for most folks. The Kennedy’s are sensitive to their client’s needs in this ever changing real estate environment. They are with them every step of the way and will help to address whatever challenges arise. About Kevin J Kennedy, Broker/Owner Kevin J. Kennedy is a dedicated and successful Realtor/ Broker. He helps his clients buy and sell homes throughout the beautiful Lower Connecticut River Valley and Connecticut Shoreline. Since buying or selling a home is a major life event for most people, both financially and emotionally, it is important to have an agent you can trust and with whom you feel comfortable. An essential part in creating a great real estate experience is choosing an agent who is detail-oriented, has up-to-date market knowledge, and is a skilled negotiator. Kevin offers all of these qualities. Today, many buyers and sellers insist on the advantages of cutting edge technology. Via his web site and IDX property finder, Kevin delivers. Using these state-of-the-art tools, his buyers save time and energy during the house-hunting process, and his sellers are able to reach numerous prospective buyers. Kevin is highly regarded in the real estate community and is a consistent top producer. He lives in Old Saybrook, is an instructor of T'ai Chi and QiGong, and enjoys photography, music, and kayaking. Call Kevin at 860-304-4433 About Sharon S. Kennedy, Realtor Sharon grew up in Old Saybrook. Her family owned and operated one of the first local real estate companies. She first received her real estate license in 1988 and now has more than 35 years of real estate negotiation experience. Sharon enjoys gardening, spending time with her horses, chickens, cats and dog along with preparing wonderful vegetarian meals for her family. She is knowledgeable in homeopathy and natural remedies. Today many buyers and sellers insist on the advantages of cutting edge technologies, Via their web site and IDX property finder, Kevin and Sharon provide state-of-the-art tools. Contact them today to discuss your real estate needs.