Why Rental Investments Fail - Some examples!

A good investor covers all their bases when getting into an investment. We know about the great reasons to have rentals, but have we investigated all the things that could go wrong?

Here are some other things that could go wrong which may cause failures:

• Unknown necessary repairs (i.e. sewer lines, roof, etc)
• Not having cash reserves to cover vacancies / major repairs
• Uptick of crime / vandalism in neighborhood
• Vandalism of property
• Infestations (pests, other)
• Bad tenants / No tenants / tenant family issue impacting stay (i.e. death, divorce)
• Rezoning of school districts / Loss of accreditation of school district
• Insufficient Property Management (not addressing tenants concerns, no notification of repairs timely - causing further damage, etc)
• Not following market pricing on rental / raising rent to frequently or too much at once
• Legal issues (i.e. tenants sue for injuries on property, taxation, etc)

So what is a person to do? The first thing is to keep cash reserves in case of needed repairs. If your personal HVAC goes out, for example, you may choose to do without until money is saved. Can't do that easily with tenants.

Until Next time!

Maria