Today, we are talking about common expenses. Sometimes, they’re repair issues and sometimes they’re not. Let’s discuss what those are and how to prepare for them.
Inspections Help with Rental Property Maintenance
One of the reasons that minor repair issues become larger than they need to be is that landlords neglect to perform basic, routine safety and maintenance inspections. Visiting your property for routine safety inspections is one of the things you must do to protect the investment and ensure it’s well-maintained. You want to check everything from appliances to light bulbs to electrical issues.
A priority during these inspections is always going to be leaks. Check your toilet valves and your angel stops. Caulk the tubs and the bathroom sinks. Performing routine leak inspections is critical and can definitely help prevent major issues from occurring.
In general, water is never good if it sits or if it’s rushing and causing a leak. You can start with a $50 problem and watch it turn into a repair that costs thousands of dollars because it leads to damage and mold. This is a danger when the water is ignored or nobody knows about it. When you’re regularly inspecting your property, you can make sure to catch these things while they are small and not yet complex or expensive.
Your routine safety inspection should also include checking the smoke and carbon monoxide detectors. Those two items should definitely be on your high priority list to make sure they are up to code and functioning correctly. Not only can smoke and fire cause potential property damage, but if you have residents living inside the property, you could be in a lot more trouble. Make sure you have proper detectors in the rental home and that they work.
Pricing Can Cost More than Maintenance
People always think of maintenance as a major cost, and it is. But, not having a resident in your rental property is actually a much larger cost than anything that may need a repair in the home.
When you’re not generating revenue, you’re costing yourself a lot of money. And, you have expenses coming out the back end without any rental revenue coming in. This is a huge problem.
An overpriced home leads to vacancy, so make sure you’re not leaving your property empty and on the market. The longer it’s unoccupied, the more work you’ll have to do trying to find residents who are willing to live there. This will cost you more money than rental property repairs in both the short and long term. You want to generate a lot of showings, and to do that, you have to have your property priced correctly.
Don’t raise your rent to the point that it’s above market, especially if you have a good resident in place. When that resident leaves, you have to pay for turnover costs and vacancy costs and leasing and marketing costs.
Your pricing will always depend on the market and what it bears. You can attach the highest possible price to your rental property, but your residents will leave as soon as the lease has ended. Trying to make a couple hundred dollars will only cost you thousands. Pricing is huge, and shouldn’t be overlooked when you’re thinking about rental property expenses.
Statewide Rent Control in California and Associated Costs
The lease expiration process is also an expense that San Diego owners need to prepare for. If a lease concludes and you want to raise the rent when it renews, you have to pay attention to the rent control limits. The new rent control law, or AB1482, went into effect on January 1, 2020, in San Diego and throughout California. So, knowing the law shows its importance yet again.
If you do want to increase the rent, you have to make sure you are within a certain guideline or standard and within the perimeter of the law. Could it cost you money if you are not careful in doing so? Absolutely.
Ending up in court over something you didn’t completely understand will definitely cost you money. Renting out a home is going to be extremely expensive if you don’t understand the laws in California and San Diego. Don’t let yourself lose money this way.
Make sure you’re running your business correctly. This includes understanding the local, state, and federal laws. As the investor and the person who owns the property, you are ultimately responsible. It’s easy to make a mistake because you didn’t know it was a mistake; but it’s not an excuse that’s going to save you money or stand up in court.
There are legal ramifications and fines that can get pretty ugly in certain situations. Litigation could be one of the highest costs you have as an investor. With the new rent control law that has come into effect, you want to make sure you know it and are abiding by it.
We can help you manage all of the costs that are associated with San Diego rental properties, whether they are repairs or something else. Talk to us about how to avoid vacancy and price your home correctly. You can contact us at Mynd Property Management to learn more. We look forward to talking to you and helping out in any way that we can.
You can also visit our Facebook group of investors, which is called Master Mynd. It’s a real estate investors’ club, where you can exchange ideas with other owners. Check out our weekly podcast as well, called The Myndful Investor. We invite leaders in real estate and property management to talk about their success and, more importantly, their failures. There’s a lot to learn from this relatable content.