Finding yourself unexpectedly in possession of a vacant property?
As an accidental landlord, managing a new rental property is a daunting task. There are taxes to pay, regulations to follow, renovations to take care of - and on top of that, tenants to find.
Don't panic. That's where a property management firm swoops in.
Don't go anywhere.
How and Why People Become Accidental Landlords
An accidental landlord is somebody who obtains a rental property by chance and - usually - intends to rent it out to tenants.
This usually occurs for one of two reasons:
- A person inherits a property
- A homeowner relocates and can't sell their home
Slow real estate markets can make it difficult to sell homes quickly, leaving the previous owners in a difficult position.
But it's not all bad news...
Upsides of Becoming an Accidental Landlord
With a little guile, becoming an accidental landlord can generate a stable source of passive income.
Renting out a property can help cover mortgage payments, property taxes, and other expenses. This additional income can be especially useful in high-demand areas, such as the San Diego real estate market.
Another benefit is value appreciation.
Most properties increase in value over time. The reasons vary from market circumstances to improved infrastructure to inflation - but the end result is the same: increasing property values lead to profits in the future.
The Headaches of Managing Tenants
It's not all sunshine and rainbows.
The biggest headache most landlords have to deal with is their tenants. Unreliable renters, flaky tenants, and financially unstable people create financial and legal problems that can make them more trouble than they're worth.
In addition, there's a large financial responsibility in owning property. Unexpected expenses, repairs, and legal fees quickly add up. Accidental landlords can find themselves grappling with fair housing laws, eviction procedures, and lease agreements.
To Rent or To Sell?
The fundamental question, then, is whether it makes more sense to rent a property or to sell it.
Ultimately, this decision depends on your financial reality.
To answer it, first consider the local real estate market. If property values are declining, it's probably smarter to rent out the property until conditions improve. That will help cover costs and allow you to sell when market conditions are favorable.
The other side of the coin is the state of your finances.
If you are in need of a lump sum of cash to pay off existing debts, it may make more sense to sell immediately rather than hold on to a property.
Making the Most Out of Unexpected Fortune
For many, the responsibilities of managing a rental property can be overwhelming.
Hiring the right property management company can be a game-changer in this regard. They'll handle all vital aspects of managing your San Diego rental property, including:
- Tenant screening
- Tenant placement
- Maintenance and repairs
Additionally, the property management company will have a thorough understanding of local rental regulations. They'll ensure your property remains compliant and profitable.
Experienced Property Management Across San Diego
Becoming an accidental landlord can be a blessing in disguise.
Understanding the potential difficulties of tenant management and gauging whether or not to sell your property is vital when deciding what to do with your unexpected windfall.
Our property managers at Income Property Advisors Inc provide a range of services across the San Diego area. Click here to find out more.