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I inherited a property.

I would like to be a first time landlord if the numbers work.

If you are a landlord, what fees/expenditures had you not anticipated?

On my spreadsheet I have the basics: taxes, condo fee, water/sewer. I feel like I am missing more hidden costs.

Information from the comments:

No mortgage, small HELOC. I am co-owner with sibling. BTW: My friend told me he wants to only rent because he doesn't want to be bothered with ownership. That is why I am interested in being a landlord

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    what about a "sinking fund" - save, say, 100- a month to pay for the inevitable item such as a new roof, which only arrives each few years.
    – Fattie
    Jul 30 '20 at 22:02
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    Renters are typically hard on stuff, so you'll be replacing carpets more often, cleaning costs, possible eviction/court fees, agents and leasing costs, costs while the property is vacant. Insurance may be higher and you may want to mandate that the renter carry renters insurance (or pay for it yourself as part of the cost).
    – Ron Beyer
    Jul 30 '20 at 22:13
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    A Member flagged as off topic, opinion. I disagree, but feel as though we've answered an identical question, an exhaustive list of potential costs of homeownership. Not easily finding it, right now. Jul 30 '20 at 22:21
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    For one seasonal rental property, one afternoon I got a call from the neighbor to come over because water was running out from under the front door (an indoor water feed had broken). While insurance covered much of it, it wasn't 100% (the same held true for prorated hurricane damage to the roof on another rental property). On the other side of the coin, I sold another rental property and 10 days later, water was oozing out of the concrete garage floor. The underground house water supply pipe had corroded. Man the jackhammers! Echoing Fattie's suggestion, put money aside for the unexpected. Jul 30 '20 at 23:20
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    Location? it might help to focus answers. I know you said you inherited it, but is there a mortgage? Are you the only owner? Jul 31 '20 at 13:23
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You'll also need insurance both to protect the property (not the renters possessions, I suggest requiring them to have renters insurance for that) and liability coverage.

Make sure you know which things your HOA/Condo fee covers and which it doesn't. Also investigate the financial health of your HOA/Condo association since insufficient reserves can result in special assessments (they collect a pile of money from you when they come up short for major repairs).

Be financially prepared to weather periods of vacancy or non-payment/eviction.

You'll want to budget for repairs and maintenance (carpet gets ruined, appliances die, roofs fly off, pipes burst, etc). You could review age and average lifespans of each major item and calculate an annual budget for their replacement if you wanted (furnace 20 years, water heater 12 years, carpet 5 years, etc). I found that a bit tedious and unhelpful since breakdowns don't happen on schedule. Instead, I prefer to just make sure I have access to a large credit card limit and reasonably liquid assets to cover whatever might crop up.

If you don't have say $10,000-20,000 that you can access in short order, you might want to make sure you have an easy way to access/borrow against the home's equity.

Research screening methods to reduce your chances of having a terrible tenant, lots of work up front can prevent significant costs.

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    It is not practical to rent a single property; One bad renter will end your equity. A nephew has rented several properties for years; He had to develop several methods to evaluate renters; mostly base on bad experiences. Aug 4 '20 at 19:47
  • @blacksmith37 Good point, screening tenants is super important, added a note about that in answer. I don't agree that it's impractical to rent a single property. I started with one, most people do. A bad tenant has a bigger impact on a smaller portfolio, but people should screen potential tenants thoroughly regardless of how many units they have.
    – Hart CO
    Aug 4 '20 at 20:25
  • One story; tenant did not pay rent for a couple months ,finally moved out ( it takes very long to get an eviction). H went in to clean the mess ,she left a couple boxes of rags. She sued in court because among other treasures ,there was a mink stole in the rags ; she won the case in a cook Co court. Aug 6 '20 at 0:30

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