Surprises in life appear in many forms. Traffic accidents, natural disasters or wedding anniversaries…. In many cases, one cannot anticipate or plan for things they are not expecting. The same holds true for property management. Based upon personal experience as well as the experience of others, here are a few surprises many of our investors/landlords may not be expecting.

1-Costs: Even prior to owning the home, investors may forget they have to pay for things like an appraisal or home inspection. Once they have completed their purchase they also pay Home Owner’s Association (HOA) transfer fees and public utility fees (many companies require a deposit of $100-$200 just to set these up).

2-Registration: If you own a rental property in Maricopa or Pinal County, you are required to register it as a rental and pay rental tax depending on which city your home is located in (you also have to register with the city to obtain a tax license to pay rental tax). HOA’s often require owners to submit forms with tenant signatures and information if they are renting out their investment properties.

3-Time to evict tenants: This timeframe can take as long as 8 weeks if it goes to trial and tenants decide to drag things along. A combination of having to give proper notice and exercise restraint with patience make it more difficult to extract tenants who don’t pay than simply removing them and changing the locks.

4-Maintenance: Houses age and with time things break. An air conditioning unit may last 10-15 years, a roof 20-30 years and a hot water heater may only last 8 years. Each of these items can be costly, even thousands of dollars and may break a lot earlier than anticipated. Investors should set aside money upfront or month to month from rental income to cover such expenses.

5-Vacancy Time: Some may perform calculations based upon a year of rent without considering the cost of the home sitting vacant. One should factor in at least 1 month a year in vacancy time. If you are more conservative you may factor in 1.5-2.5 months. For a home that rents for $1,000.00 a month, this translates to $1,000.00-$2,500.00 less income for that year.

There are always surprises, especially when it comes to investing and property management. One can only plan ahead so they are better prepared when they arrive.