4 hidden costs of being a landlord

4 hidden costs of being a landlord

Life as a landlord may be tempting to homeowners  unable to sell their homes and others looking to add properties to their  investment portfolio.

However, many costs associated with rental  properties catch novice landlords by surprise. The following are four hidden  expenses experts say new landlords should consider.

1. Increased insurance costs

Rental homes may cost more to  insure.

For example, homeowners who cannot  sell their homes should be aware that renting out the home changes the  owner’s status from primary occupant to “investor,” says Brian Mikelbank, an  associate professor of urban studies at Cleveland State University, in Ohio.

As a result, it costs more money to insure the home with a special  landlord insurance policy. According to the Insurance Information Institute, the  premium is about 25 percent more than with typical homeowners insurance.

The tenant rent payment may help cover the increased expense, but Mikelbank  says landlords shouldn’t always count on it.

“Homes will usually have tenants for less than 12 full months out of the  year, since it takes time to find a renter, or a tenant could potentially leave  before their lease is up,” he says.

Read more:  http://www.bankrate.com/finance/real-estate/4-hidden-costs-of-being-a-landlord-1.aspx#ixzz2lgiYl3Bz Follow us: @Bankrate on Twitter | Bankrate on Facebook

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