The Importance of Rental Property Condition

Rental property condition will play an important factor in your success as a landlord. Properties that are well maintained and in sound physical condition will work harder and more efficiently at producing cash flow for their owners.

In essence, a well-maintained rental property can be compared to a well-maintained car. They'll both perform their intended functions with less possibility of costly breakdowns and interruptions.

Attracting Good Tenants

If your rental property is not well maintained, then your ability to attract and rent to good tenants will be severely handicapped. The majority of good tenants prefer to live in clean, decent housing that is maintained and up to code. As smart consumers, they expect to get what their rent pays for, and nothing less.

Ability to Charge Market Level Rents

Rental property condition will play a significant role in your ability to charge market level rents, especially when vacancy rates in the area are above normal. To compete with properties that are in better condition, you'll have no choice but to lower your rent in order to fill any vacancies. And, lower rent levels will also lower the properties fair market value. It creates a downward spiral.

Affect on the Neighborhood

Properties that are well maintained and show pride of ownership will have a beneficial influence on the neighborhood. They promote stability that creates the chain reaction of attracting good tenants paying market rents that subsidize maintenance of the properties.

Insurance Costs

For obtaining lower insurance rates, it's essential that your rental property is in sound physical condition. The condition of the roof, stairs, grounds, electrical, plumbing, and mechanical systems all play a big role in setting the annual insurance premium for the property.

Cash Flow Stability

For landlords, there's nothing more frustrating than to be faced with a large repair bill that could have been prevented with simple, basic maintenance. Since these situations can happen without warning, they'll certainly put an unexpected dent in the property's cash flow for that month (or year) depending on their severity. An ounce of prevention is usually worth a pound of cure in the rental property business.

Affect on Resale Value

When it's time to sell your rental property (hopefully you'll be trading up), the price that a buyer will pay will be influenced by its condition. Your property will be better able to compete with other similar properties that are on the market if it is in good condition. Buyers know that well maintained and attractive properties in good areas command top dollar because of their higher rental incomes and lower overall maintenance and repair costs.

For more in-depth information about rental property condition, please visit The Landlord's Library book collection. It's a terrific, one-stop source for practical, in-depth information on the entire subject of residential landlording.

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