Buying a flat or a house, it’s the kind of investment just about everyone dreams of. And rightly so, as real estate investments have proven to be very smart and sustainable. For many, it is a purchase to make use of it themselves – and thus live in it themselves, while for others it is more interesting to rent it out to generate an extra income. Still, there are pitfalls that will cause rent loss. Here are 5 useful tips to avoid that money loss.
1. Plan your own time constructively
2. Map out all possible rental issues
3. Avoid large damage costs by drafting a clear contract
4. Be prepared for unforeseen circumstances
5. Make sure you have proper insurance
Plan your own time constructively
One of the most common reasons why landlords suffer rental losses is the ‘time is money’ principle. After all, a lot of time goes into renting out a flat or a house. And that time also costs money. Searching for and finding suitable tenants, sorting out unforeseen damage and circumstances, the rent not being paid on time, the co-owner’s meeting you have to attend… Whether you take care of all this yourself or have someone else do it for you, the number of hours spent on all these things costs time and consequently money.
Map out all possible rental issues
Anyone who rents, will occasionally face ‘rental woes’ or rental problems. First of all, finding the right tenant, who then also pays his or her rent on time and standing, is a quest. By the way, did you know that some 67% of all homeowners have had problems with unpaid rent? That literally costs you money, as well as time to put everything back in order.
Time that can take up to 9 months (!), according to research itself. Assuming your property’s rent is €750, and you are therefore left without rental income for all that time, that will quickly cost you €6730. As the owner of that property, that can quickly put you in financial trouble.
Avoid large damage costs by drafting a clear contract
“You take better care of what is yours, than that of another”. It is not something we consciously propagate as human beings, but it is something we easily allow ourselves to be caught by. Even when renting out a house or flat, this is, unfortunately, often the case. After all, whether you like it or not, breaking something can happen quickly.
Are the walls of your flat or house damaged or discoloured after the stay of one of your tenants? Or are you dealing with a damaged shower or a malfunctioning kitchen sink? Often, the cost of these damages is a lot more expensive than you might initially think, especially if you want it fixed urgently.
Be prepared for unforeseen circumstances
The next reason for rental loss is unforeseen or natural damage. Fortunately, we encounter very few cruel natural phenomena in Europe, but it is hard to avoid water damage from excessive rainfall or eye damage from hailstones, for example. Even a simple water leak or a crack in the window can cause huge costly consequences.
In addition to damages, necessary renovation costs also mean that you have to set aside (unforeseen) budget.
Make sure you have proper insurance
Have you entered into an insurance contract but discover snags? For many, that discovery only comes when it is already too late. And yes, it happens a lot.
So are you taking out an insurance contract? Then really check everything, including the small print. Because they could well cause you to miss out on compensation.
Are you new to the rental business and don’t know how to go about things? Immowi knows what to do! We’ll be happy to help you.