You may think it’s only the tenant who has a hard time paying the mortgage, but as a real estate investor or landlord, there may be times when it’s hard for you to pay the mortgage. Here are some things to consider that will help you stay current with your lender and avoid mortgage late payments.
Keep your properties fully occupied. While it may sound overly simplified, this is the most obvious method for ensuring you’ve got rent money coming in each month to cover your property mortgage payments. It’s easy to get busy and put off advertising and property showings but you will regret it when that rent stops coming in. Don’t allow yourself to get slack on advertising for new tenants. And don’t put off screening applicants or filling your properties because you get busy or overworked. Recognize filling your vacancies as a major aspect of your REI business success and deal with it quickly and efficiently every time. A great practice is to start to advertise for new tenants prior to your old tenants moving out. This will help keep the cash flowing.
Do your best to find quality tenants. While it’s important to keep your properties occupied, it’s more important to find quality tenants that will pay rent when it’s due. By using background and credit checks, you can find the best tenants available and thereby do what’s possible to keep your rent coming in regularly, which will help you pay the mortgage when it comes due.
Look for longterm tenants. Consistent and stable longterm renters are crucial to a landlords investment success. If your lease is less than one year then you will find yourself on a tenant placement treadmill. Kansas City and the surrounding areas is a great rental market with a lot of qualified tenants that will rent for 2 years or longer.
Maintain your property and make it a place that you and your tenants would want to live. If your tenants love the property then they are more likely to pay rent timely, lease it for longer and take better care of the property while they live there.
Anticipate expenses before they happen. Most capital expenditures don’t pop up out of thin air. It’s important to set aside money to deal with improvements and replacing expensive items like roofs and HVAC systems. A good rule of thumb is to set aside 10% of your rent amount for repairs and capital expenditures.
Earning a living as a landlord is challenging and at times can be a cash drain. With these tips and best practices you will be able to keep your investment in a stronger financial position and keep your cash flowing.