There is always an innate risk to renting out your property but it is a risk that is constantly overshadowed by the allure of making some cash on the side.
But if you want to lease out your property, then you’ll need to consider the detrimental side effects of leasing and take steps accordingly to mitigate these issues from damaging what is essentially your investment.
Most of these issues are created by the people you rent to and thus, the burden of dealing with emotional fallouts could very well be the one thing you’re going to have to steel yourself against.
Most problems occur with tenants. Not all tenants are bad but the bad ones you do get are going to make you wish you weren’t in the property rental market. If the worst your tenant does is pay the monthly fees late or outright refusing to pay the fees, consider yourself lucky. Some landlords have to deal with rowdy tenants who cause damages to the unit and refuse to pay for it.
There’s not much you can do except take legal action but to do this, you will need to include all caveats pertaining to property damages/payments in your contract and be doubly sure that the furniture and items in the unit were in good condition before you leased it out.
It will help if you have pictures that are hard dated to the most recent time; otherwise, it’s all just words.
2. Prolonged vacancy period:
The lull between having a vacant unit and filling it with a tenant will cost you money. If it’s a condo, you have maintenance fees to pay. If it’s a landed property, then constant upkeep of your lawn/garden will be necessary. You can’t expect to rent your home when the grass and plants are growing out of control or dying.
3. Legal liabilities:
People are quick to sue over the smallest things these days. It’s become part of a cultural norm to sue when you feel slighted just to make some money off someone as compensation for hurt feelings, wasted time etc.
However, if any accident occurs due to potentially harmful objects in your property, the tenants can attempt to sue you for negligence. This could easily be fraudulent but the weight of having legal liabilities breathing down on you is exhausting on its own. Include your own caveats in the contract to protect yourself and get a lawyer to advice you.
The property market is like a pendulum. It will swing upwards and downwards and unless you’re expressly following it, you’re likely just moving with the tide. As the market is unpredictable, it becomes difficult to determine if you can find a tenant willing to accept your price.
Dropping your rental price is an option but it depends if your financial situation allows you to do so. Also, if the tenant has to break contract for whatever reasons, you cannot expect him to stay if he has to leave even if the contract is being broken.
Steps need to be taken to protect yourself and ease the tenant’s exit from the contract from the beginning in order to lessen the impact of something this sudden from creating a vacancy you will struggle to fill.