Page 62 - December 2017

LISA SANDERS
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What can you expect when you own a rental property?
If you’ve ever considered becoming a rental prop- erty owner, it’s smart to weigh both the benefits and
other issues. You should also keep a robust emergency fund to handle unforeseen damages and hire professional contractors as
needed.
Finding tenants and collecting rent: There’s no profit in
owning a vacant rental property, so one of your top prior- ities will always be finding and keeping qualified renters. While conducting interviews with prospective tenants and doing thorough background checks is a commit-
ment of time and money, it’s worth your peace of mind to know that your tenants will be respectful of your property
es before jumping into life as a landlord. e
Income: The most obvious advantage to being a landlord is that you gain a new in- come stream through your tenants. With the right investment, the rent you collect may cover a high percentage of the mortgage on
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Benefits
the property, if not all of it.
Market trends: In Chicago, rental rates have been gradually
rising at an average of about 2 percent each year, making now an ideal time to explore your options in the market. Work with your broker to learn more about individual neighborhood trends and decide what works best for your long-term goals.
Greater control of your investment: When you put your money into stocks and bonds, you have very little power over how their value increases or decreases. A rental property, on the other hand, is a tangible asset, which means you can take actions that directly raise its value. By reinvesting capital in maintenance, renovations or attractive updates, you’ll command higher rental rates and a better market price when you decide to sell.
Challenges
Maintenance: Your most prominent expense as a landlord will be your property’s upkeep. You will be liable for maintaining your properties at government code, including plumbing, electrical systems and structural soundness. Caring for a larger building may require hiring a superintendent to handle small repairs and
and pay their rent on time.
Taxes, assessments and insurance costs: Property taxes are due whether you have tenants in the property or not, as are any ex- pected assessments if the property is part of a homeowners as- sociation. You should also be mindful that insurance costs on a rental property can run up to 25 percent higher than a standard homeowners policy.
Like any major investment, owning a rental property is a complex step that requires a good deal of personal attention. Ap- proaching this opportunity with clear eyes and thoughtful strate- gy will help you minimize the risks while increasing your reward. d
Lisa Sanders of Dream Town Realty has been selling real estate for more than a decade, averaging at least 50 homes per year. Her awards include the Chicago Association of Realtors’ Top 1% Pro- ducer, Five Star Professional Award for exceptional client service and #1 Realtor in several Chicago neighborhoods.
Real Estate
62 CHICAGO LODGE 7 ■ DECEMBER 2017