Financial Plan

Do you have a financial plan for you maintenance plan? Have you considered how you would cover expenses in the event of a eviction and loss of rent? What funds and coverage will you need if there is a fire? If a disaster happens, such as high winds, tornado, hurricane, fire, and flooding, how will you sustain the property? Insurance may not cover anything. Talk with your bank or available financial institutions about what financing you could obtain if necessary. Even better, establish and emergency find in an interest bearing account, If something happens, you have an immediate resource to use.
You do not want to fall victim to the old adage “fail to plan and plan to fail.” Planning now can help prepare for the unexpected. Of you need assistance, contact us- we are here to help you with you investment property.

Prepare a Maintenance Plan

Just like you home, periodic work is necessary to maintain investment property. Do you have a maintenance plan for future years? It is not practical to bury you head in the sand and “hope for the best” when it comes to roofs, paint, carpeting, appliances, fencing, plumbing, electrical, air-conditioning, heating, miscellaneous repairs, and more. Figure out the life of all major items and make a plan to have work done periodically to avoid unnecessary major rehabilitation. Take a “preventative maintenance” approach to reduce expenses and stress.

Keep Good Property Records

Another area that everyone dreads is an audit by a government agency, particularly the Internal Revenue Service. The best way to prepare for an audit is to create and maintain you investment records consistently and accurately. Keep all tax returns, property management reports, maintenance records, financial receipts, and property documents organized in one place where you can easily retrieve and review them if you have an audit. Maintain them yearly and when you need this information you will have it for any situation, such as an audit or sale of the property. It is much easier to maintain files than try to recreate them later. In Addition they will probably be more accurate.

Renew your insurance

This is probably the most obvious and important item to have in place for unwanted events. It pays to review possible scenarios and coverage with your insurance agent at least once a year. Insurance policies are subject to change, particularly when disasters occur.
With all the disasters that have occurred in the last few years and resulting in high losses, insurance companies are continually making major policy changes. Often notification are obscure or in “small print.” Too often, property owners don’t find out that their insurance does not apply to a particular situation until “after” it happens. Find out specifically what disasters emergencies, tenant damage, and rent losses are covered to not covered.