Unfortunately, things break – even those items that are regularly and properly maintained. This article is not meant to scare you – quite the opposite! It is, instead, to reassure you: that even the most seasoned landlord cannot foresee everything. Don’t think that just because you finally closed on your new investment property that nothing can possibly go wrong during the first year – or that, since you have regularly performed scheduled maintenance, the hot water tank is therefore incapable of leaking in the middle of the night.
There are a lot of unpredictable circumstances that can take you by surprise. Much like you should be doing with your own primary residence, an emergency repair fund should be established so that you and your tenant are not unnecessarily stressed. If possible, it’s a good habit to set a portion of the monthly proceeds aside in a separate bank account – perhaps even a relatively-conservative, high-yield savings or money market fund. As the funds grow over time, you’ll grow more confident about being able to handle anything that comes your way. So, see? No need to worry…!
Of course, there’s always credit cards and lines of credit, but why finance something if you can afford to avoid paying someone else for using their money? The last thing you want to turn your investment property into is a burdening fifth wheel – especially as a series of high-interest credit cards that just never seem to get paid off… The managing of your own personal finances is at your sole discretion. Just remember, “cash is king” for more reasons than one in this instance – so save as much of it as possible for those rainy days… and, to stay on the safe side, count on a storm to occur on at least one of those days…