How to Reduce Risk When Investing in Rental Properties
  • Rissoft

How to Reduce Risk When Investing in Rental Properties


Investing in a rental property can come with big returns or major losses. Even though rental demand is high and rental income has hit record highs in the last year, it is still risky to invest in rental properties especially because it can take years to recoup the investment and the housing market can be unpredictable.

Below are some simple Tips that can help reduce risk when investing in a rental property.


  • Pick the Right Property: picking the right property is more than just buying a property in a hot market for a reasonable price. It is important that you purchase a property that needs minimal work so that it can be leased to potential tenants right away and that it can be purchased for a price that still allows the landlord to make a healthy profit each month even after the taxes, maintenance, and mortgage payments are made. Also, making sure that the property has had a thorough inspection and that you have a list of previous maintenance and inspections completed at the property is essential before any purchase is made.

  • Focus on Marketing to Reduce Vacant Apartments: Even if you buy a great property in a perfect location, it does not guarantee that you will find tenants to fill empty units. Every month a rental property is left vacant is more money you will have to pay out of your pocket for your property’s maintenance, mortgage and other expenses. Every landlord and property manager need to make sure they are using all different forms of marketing to help fill vacant rental units right away.

  • Avoid High Expenses: You should always plan for higher than expected maintenance costs when trying to figure out if a potential rental property will be worth buying. If you do find yourself paying higher than expected maintenance costs, it can be extremely problematic because it may be months before you can raise rent with the hope of recouping unexpected expennses. In addition, in certain states and localities you may be limited on how high you can raise the rent at the end of a lease making recouping higher than expected expenses very difficult.

  • Using Effective Property Management Software: If your purchasing a new rental property do not wait until your facing deadlines and issues to get organized. Having effective and time saving rental property software on day one will help you avoid costly mistakes that waste your time and money.

This post is provided by RISSOFT Residential and Commercial Property Management Software, specializing in innovative and cutting-edge property management software for all 50 states. Request a demo or contact us today to receive more information.

Disclaimer: The information provided in this post not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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