The idea of walking to your mailbox and getting a rental check every month is a fantastic position that many investors want to find themselves in. The reality is that these checks will stop on a dime if you do not take care of your property. As the owner, you dictate just how well your investing business goes by how you take care of your properties. If you think your property will last forever without putting time and money into it, you will have grossly underestimated the industry. In order to maximize your investment, you need to do the same things you would do to your primary residence, and in most cases more.
You can cut corners all you like and defer maintenance from year to year, but sooner or later it will catch up with you. You should treat your investment property much like you treat your car. Every so often you need to clean it and take care of it. You need to change the oil and perform maintenance on a routine schedule. You can probably go a few years without doing anything to your property, but all of a sudden things will start to break down – causing you to reach into your pocket and fix them. Unfortunately, this is the inevitability of the business that we have grown accustomed to. When such a scenario arises, it is helpful to have reserves lined up. If not, your income source will shut off. In a matter of mere months you could be fighting just to keep the property.
There are several simple things you can do to maximize the useful life of your property. Annual servicing of the furnace, water heater, oil tank, central air and fireplace are just a few of the areas you can focus your attention. The total cost of all of these items will not be much more than $500 for the year, but what you won’t see is that they will help you avoid the phone calls at 2:00 AM – letting you know the heat stopped working. They will also help you avoid turning a $100 problem into a $1,000 problem. You can go cheap with your rental properties all you want, but if you want to maximize your return and keep it going for as long as possible, you need to take care of them.
In addition to annual upgrades, you should constantly be looking at any insurance or warranties you have on the property. Ideally, you will never have to use them, but the odds are you will at some point. If you notice a flaw in your policy when you need it, you are probably too late. This is your investment and you need to do everything you can to make as much money for as long as you can with it. This investment offers you passive income, tax benefits and the ability to have someone else pay down your mortgage. If you neglect this, your tenants will soon follow suit and you will be stuck with a diminishing asset.