Austin Luxury Homes

Probably the single most common mistake that new real estate investors make when they buy a home to turn it into a rental property is expecting that the home will always be rented when they figure out how to cover their costs. You should never expect that you will always have the rent from a rental home to pay for the mortgage or other expenses of the home because there will always be at least some time when the home is not rented.

Even if the home is rented the tenants could be late with the rent, or could not pay the rent for a month at all and you could end up on the hook for those costs.

If the home is vacant for even a month you will have a lot of expenses to pay that will come out of your pocket. In addition to the carrying costs of the home you will have to pay to fix any damage that the previous tenants did and to spruce up the house for new tenants with new paint and new carpet and other cosmetic touches. You will also have to absorb the costs of advertising the rental, screening tenants that apply to rent the home and the cost of the time that it takes you or a property manager to show the apartment and process applications.

If you don’t plan ahead and have money set aside to pay the costs and upkeep of the home while it’s not rented as well as having money set aside you will end up eating the costs of maintaining the home until new tenants move in. More experienced real estate investors suggest having at least one month’s worth of expenses for the house set aside so that you don’t end up having to pay all the costs of the house out of pocket if for some reason the house ends up sitting empty or if the tenants miss a rent payment.