Before investing in any duplex property and being a landlord, you should know what costs to expect. Read on to learn about these duplex property costs below.
Looking at how low mortgage rates are right now in the country and how high rental prices are, many duplex property investors are enticed to becoming landlords. This has, in turn, resulted in several investors building or developing rental properties with the aim of renting them out.
Despite the positives, however, jumping into being a landlord is not always advised. Why? Well, there are a few things you need to know about being a landlord. In particular, you need to know about landlord costs. This in mind, this post gets to look at landlord costs you should keep in mind before renting out your duplex.
Here are five landlord costs you need to take into account;
- Property Management Fees
- Taxes & Insurance Fees
- Legal Advice & Miscellaneous Fees
- Maintenance & Repairs Fees
Duplex Property Management Fees
While you can be able to rent out your rental duplex without a property manager, it is advised not to do so. This is because there are so many things they can do for you. For instance, they can market your property bring you renters without you facing the hustle involved. Additionally, they can find good tenants, arrange for repairs and maintenance, collect rent and deal with issues like tenant evictions and complaints.
If you own more than one duplex unit, you definitely need to hire a property manager. This is more so important if you reside far from your investment. If you are still not sure if you should hire a property manager, simply ask yourself;
- Do you want to meet with tenants as well as conduct background checks?
- Are you prepared to handle and deal with a tenant eviction?
- Do you have time to deal with maintenance and repairs?
If you answered no then you definitely need a property manager.
With renting out properties, landlords, especially first-time landlords, aren’t aware of vacancy risks. In particular, landlords don’t understand or know of the cost of vacancy. When you have a vacancy, you’ll be forced to make mortgage payments from your pockets. Furthermore, you’ll need to handle all repair and maintenance costs. Yes, even these costs will be from your pocket. As a matter of fact, you’ll be forced to part ways with such costs till you get a renter.
One way of dealing with vacancies is putting in place a backup plan. This is important as it helps offset a number of negatives associated with vacancies. One such plan is having an emergency fund. This will help you survive vacancies with little hustle. Keep in mind that the more your property remains vacant the more you’ll be forced to stretch the limit of your wallet.
Taxes & Insurance Fees
Making a duplex investment just like any other property investment requires you to make property taxes. Furthermore, you’ll also face the cost of property insurance or any associated fees that associate with your property. With taxes and insurance fees, there is no avoiding them. You’ll have to make these payments. Some landlords think that they can avoid these fees just because they have a vacant duplex. Well, no. Even with a vacancy of 1 year, you still need to make these payments.
While on matters costs insurance, it is important to point out that rental homes cost more to insure. Looking at our landlord’s insurance premium, it is clear that it costs more to use a landlord insurance policy to insure an income property. Use a rental income to deal with increased expenses within the property.
Legal Advice & Miscellaneous Fees
If you are thinking of becoming a landlord, you’ll need a good attorney who’ll offer you legal advice. The thing with hiring a good attorney is that they cost money. In fact, they are not cheap you might just have to part ways a good sum. That said always ensure you have this accounted for in your budget.
Other than legal fees, there are additional miscellaneous fees you should allocate money to. This includes administrative costs. Administrative costs tend to relate to a variety of things. For instance, they can relate to interviewing potential clients or running a credit history of clients. This also goes for checking a tenant’s references.
Maintenance & Repairs Fees
Being a landlord goes far beyond collecting the tenant’s rent. As a landlord, you need to keep up with all things repairs and maintenance. You want to make sure that you are able to meet your tenant’s demand for fixing and maintaining things in and out the duplex property. Some of the issues you are likely to deal with include issues with electrical installation and leaking. Leaking can be on the roof or a drainage pipe within the unit. If there is a boiler, chances are that repairs might be around making it work properly.
There you have it, landlord costs you should keep in mind when thinking of renting out your duplex. While some of these costs are unavoidable, there are a few things you can take up to ensure you mitigate them. For starters, you can make sure that as a landlord you are well familiar with all things laws and regulations. By doing so, you’ll be well aware of your liabilities as a landlord as well as your responsibilities.
Additionally, this will give you a hint on how your relationship with your tenant is or should be like. Proper inspection is also one of those things you can do to mitigate landlord costs. How? Well, they’ll help you avoid unnecessary expenses on repairs.
Thinking of renting out your duplex? Get in touch with us today and see how we can help you. You can as well get in touch with Duplex Invest for additional information on all things duplex property. To do so, dial this phone number 1800 600 098 or send an email to email@example.com.