02 May Where to Spend and Where To Save
How Spending Money Will Actually Help You Save
Saving money is a top priority for everyone these days, but sometimes there is an unusual paradox where spending money can actually end up saving money in the end. Knowing where to spend and how it will save in the rental market will influence the bottom line for any property owner. There are several aspects where spending money before purchasing a property, signing a lease with a renter, and through the duration of a lease will benefit the property owner.
When looking at property to purchase, spend a little extra to get the experts in for full inspections. Paying independent professionals to inspect the structure’s integrity, the roof and the mechanical systems for longevity will save money on repairs once the transaction is closed. Of course, there will always be repairs and replacements on these systems later, but ensuring they are in good shape when initially purchasing a property will give the property owner time to build some equity before having to make those repairs.
Another aspect where spending some money could very well save money later is in the tenant screening process. It is important to have potential tenants fully screened before signing a lease. Paying to run full credit checks and having employment and character references checked will likely save the money, time and trouble that could arise without these verifications in place. Once a tenant passes all of these screenings, it is much less likely that money will have to be spent chasing delinquent rent payments or paying eviction costs. These kinds of screenings will probably eliminate costs related to damage that does not result from normal wear and tear because the verification of the tenant’s caliber was done before letting them move into the property.
Throughout the duration of a lease, performing regular inspections will help minimize damage and excess repair costs even from regular wear and tear. Paying for regular maintenance on the mechanical systems, like the furnace and air conditioner, will also keep them in good working condition and save on costly repairs. Paying for these kinds of inspections will permit repairs or replacements before extensive damage, which will save money.
Finding the balance between spending money and saving money is a delicate process. Knowing that some extra time and money spent in preventative measures will save money over the longer term will help improve the net profitability of any rental property.