Rental Property Ownership Costs Set to Cause Harships for Landlords

Numerous issues are offsetting potential profits from current rental rate increases

Costs are on the rise for landlords according to a number of recent reports. While ample factors are behind this development, the majority of rental property owners are experiencing a range potentially disturbing trends. These issues could leave landlords in the lurch where profits are concerned and may even drive some into financial hardship.

Taking a Look at the Current Trends

Rent rates are rising across the country with an increase of almost 20 percent over the last five years alone. Though this should be welcome news for rental property owners, those in many areas are finding quite the opposite to be true. With household incomes having stalled out, a number of tenants are unable to afford those average rates. This means some landlords are being forced to choose between opting out of the potential profits and simply watching their rental units stand vacant for months on end.

Those who find themselves in such a position are increasingly skimping on credit and background checks in order to fill their rental properties. As a result, they are placing themselves at the mercy of tenants who are less than meticulous in taking care of their rental homes or fail to pay their rent on time. Because of this, repairs and legal fees stemming from the eviction process are placing significant financial burdens on property owners.

Increasing severe weather and natural disasters are likewise driving up expenses for landlords, particularly those who have inadequate insurance coverage. Experts note taking advantage of the rental property insurance available to landlords and fully understanding the types of coverage various policies provide may help offset these types of costs. Damages caused by fire, vandalism and other acts that would typically fall on the shoulders of landlords are also covered under such policies.

By numerous accounts, the costs of construction and materials are eclipsing rent rates at present. For landlords, even in areas where tenants are able to cover surging rental rates, these expenses are offsetting profits. This makes property repairs and upgrades increasingly difficult to manage. Though legislation dictates commercial tenants are responsible for reimbursing landlords for at least a portion of those costs, reports indicate property owners are losing hundreds of thousands of dollars each year by failing to keep up with them.

From Another Perspective

Reports show many landlords fail to understand the extent to which property owners are liable for tenants' and visitors' injuries. This lack of awareness is costing landlords significant amounts of money in legal fees, medical bills and other related expenses. Whether renting commercial or residential properties, the owner of said property is largely responsible for the safety of its inhabitants and guests.

Insurance policies for landlords aid in mitigating these types of costs; however, coverage varies widely among policies. At the same time, coverage requirements differ depending on type of property, location, number of tenants and other factors.

Overall

Rent rates may be surging and placing tenants in difficult situations, but renters are certainly not the only ones suffering. Countless landlords are feeling the pressure of rising costs and unable to cash in on the current property value uptick. Insufficient insurance coverage and misunderstandings of the laws applying to ownership are causing their fair share of issues for landlords as well. Authorities are emphasizing the importance of being fully informed and prepared for the potential problems and continual changes taking place in the housing and commercial property sectors.

Contact Info:
Name: Roger Butler Jr.
Email: Send Email
Organization: Roger Butler Insurance Agency Inc.
Website: https://www.rogerbutlerinsurance.com

Release ID: 88913406