When it comes to rental property ownership, there are a lot of benefits. Once you have identified some quality tenants, you can enjoy consistency in income, tax benefits, and the property can serve as a shield against economic shocks. What is not as often discussed are the troubles that come with property management.

One significant issue is rental costs. As you plan, calculate, and record your monthly income, you will find that a substantial portion is spent on costs and expenses. And while they might fluctuate monthly, you can find yourself spending thousands of dollars in a month. This cuts into your ROI and cash flow at the end of the month.

In this article, the team from Action Properties will discuss the typical areas costing landlords a significant portion of their income.


Renters will always want to stay in a well-maintained rental unit. For you as a landlord, this means a 24/7 responsibility; and of course, maintenance costs.

While a small leak might not dent your income considerably, maintenance costs can cost you an arm or a leg if not dealt with immediately. The small leak that you choose to ignore can lead to the replacement of the whole water closet or a pipe burst that causes damage to the floors and the foundation.

But maintenance doesn’t have to be catastrophic. The trick to going about it is to have proper scheduled inspection and maintenance plans. Your premises, together with the appliances & fittings, should be regularly inspected.

A large, clean kitchen

In case of any issues, the defects should be handled immediately. This proactive plan for maintenance issues will reduce your costs big time in the long run.

Even with such a proactive inspection and maintenance plan, you should always be ready for emergency tenant requests. Not only is it good for your building but it is also excellent tenant management service.

Few industries can match up to property when it comes to laws and statutes that govern its transactions and dealings. Choosing to become a landlord means that you must comply with local ordinances, state landlord tenant rules, and also federal laws.

Keeping knowledgeable of all these provisions can be quite a challenge for the typical landlord. Some of the typical legal issues include security deposit claims, rent default payments, evictions, and compliance with the lease agreement.

It is ideal for property owners to have a legal partner by their side who they can rely on when things go awry.

The challenge with legal firms is the billable hours, especially when you find yourself at the center of legal cases. At the end of the case, one is slapped with a legal bill that costs you an arm and a leg.

A judge’s gavel

Since you will have to request legal advice at one time or another in your property journey, ensure you have a reputable and reliable expert by your side. They should have real estate expertise. Ask all possible questions on fees and applicable charges before legal services are offered.

It will also be important to create a comprehensive lease agreement that complies with all applicable laws. In addition, perform a deep tenant screening of all potential renters. These two steps will significantly reduce your legal woes over time.

Lack of Proper Screening

With years of experience in the property industry, we can appreciate the challenges that come with vacant units. Each landlord would wish to enjoy 100% occupancy and start raking in those sweet dollars. However, the push to have a fully occupied unit often comes with a decision to forego tenant screening.

Some landlords often cut corners when it comes to tenant screening citing either the lengthy process or additional costs as reasons. However, this decision will often prove to be the wrong one.

The tenant screening process involves analyzing a tenant’s character, financial background, employment, and rental history. It allows you to select the ideal tenant who will comply with your rules while also paying the rent on time and in full.

Two people in an interview.

Take time during the tenant screening process. Make sure to get in touch with their references and double-check all information that you are not sure about. You wouldn’t want to start adding on costs for property damage, court-related costs, and evictions.

Costs That Landlords Don’t Notice They’re Accruing

For you to be able to manage your property efficiently and effectively, you will need to work with a team of professionals. This includes plumbers, home inspectors, landscapers, and HVAC experts just to name a few.

The question: Have you managed to confirm prices for their services? Escalations? Price hikes? Hidden costs? While you might have an initial conversation, it would be recommended for you to have a service level agreement on paper to agree on terms.

Similarly, it would be ideal for you to vet your contractors and partners. You want an experienced service provider with whom you can get value for your money. And don’t forget to negotiate!


Property as an investment has great potential. It can offer you great passive income, diversify your portfolio, and also build wealth for the next generation. The challenges arise with dealing with the myriad of issues that come with it.

Offering management solutions to property owners in Palo Alto, Santa Clara, Los Altos, San Jose and other suburbs, Action Properties is the company to rely on for all your property management needs. With our experienced team, you can be guaranteed comprehensive solutions that will boost the income of your rental units.

Get in touch with us today!