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Plan for unexpected expenses and vacancies from "summary" of The Book on Rental Property Investing by Brandon Turner
As you embark on your journey as a rental property investor, it is crucial to prepare for the inevitable unexpected expenses and vacancies that may arise. These unforeseen costs and periods of vacancy can quickly eat into your profits if you are not adequately prepared. One way to plan for unexpected expenses and vacancies is to set aside a portion of your rental income each month for a rainy day fund. By consistently saving a percentage of your profits, you can build up a reserve that will help cover any unexpected costs that may come your way. This fund can also be used to cover expenses during times when your property is vacant and not generating rental income. In addition to setting aside a reserve fund, it is essential to budget for potential expenses that may arise, such as repairs, maintenance, and upgrades. By carefully planning for these costs and including them in your budget, you can avoid being caught off guard when the time comes to make necessary repairs or improvements to your property. Another crucial aspect of planning for unexpected expenses and vacancies is to have a solid tenant screening process in place. By thoroughly vetting potential tenants and selecting reliable individuals who are likely to pay their rent on time and take care of your property, you can reduce the risk of extended vacancies and lost rental income.- The key to successfully navigating unexpected expenses and vacancies as a rental property investor is to be proactive and prepared. By setting aside a reserve fund, budgeting for potential costs, and implementing a strict tenant screening process, you can mitigate the financial risks associated with owning rental properties and ensure a more stable and profitable investment venture.
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