strategies to reduce rental risk
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Strategies to Reduce Rental RiskKenneth Lee
LandhouseLeaders.com
Owning and operating rental properties like apartments and vacation homes can be very rewarding. However, it's not that simple. Investing in rental properties is like any other investment. There is a certain degree of risk that is involved.
Not everyone who invest in rental properties turn out successful with their investment. There are those who fail right from the start due to poor planning and judgement. For those thinking of starting a rental real estate business, here are a few things you can do to reduce the risk associated.
Find a good locationIt's been said over and over again that real estate is about location and it is just rightly so. The surrounding location is going to be the lifeblood of your rental business. The surrounding location is going to be the source of your tenants. Pick a location that is near commercial centers, corporate offices, schools, shopping malls and other points of interest establishments. Your primary market are the ones working and living in the area.
Purchase rental insuranceSometimes a tenant will default on his/her monthly rent or sometimes the property will get damaged. In order to protect yourself from such risks, purchasing rental insurance is a mandatory first step. Insurance should be treated not as an outright expense but as part of your rental business' operational cost.
Get the services of a property manager
A property manager can help you in more ways you can imagine. A property manager can help you find tenants for your rental property. Your property manager is also in charge of repairs and maintenance as well as paying the utilities and collecting unpaid rent. Having a property manager is advisable especially if you have several rental properties in your portfolio.
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