Making Money from Renting Is Not as Easy As It May Seem: Where Are the Pitfalls?

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“It is often mistakenly believed that by buying real estate and renting it out, you will quickly and effectively receive a return on investment or earn extra money. However, the reality is sadder and less optimistic, as property owners sometimes face various problems: from finding reliable tenants to housing maintenance, repairs, and financial obligations.

 

“Managing the entire rental process yourself is not only difficult, but today it is even economically unprofitable. In an accelerating world, people usually do not have so much free time anymore, and sometimes the rental business lacks knowledge and competencies. But all this can be avoided by using reliable rental partners,” says Martynas Tarvydas, head of one of the largest real estate rental management companies in Lithuania, “Monto”.

 

Problems that can be avoided

 

Before renting out real estate, it is useful for a person who has decided to rent out a property to know what problems may arise, what can be done to avoid them and how to solve them if they cannot be prevented. This usually causes headaches and worries. Often, the property owner himself may suffer as a result of an improperly concluded contract with the tenant. According to M. Tarvydas, for example, a contract is drawn up that does not contain clear criteria for the conditions of eviction or does not provide for what will happen if the tenant is late in fulfilling financial and other obligations.

 

According to the head of "Monta", there are stories when the tenant does not pay rent on time, damages the property, makes noise, organizes parties, neighbors complain about him, but the contract is drawn up in such a way that there are no legal possibilities to evict him. Then the property owner has not only a headache, but also has to spend a lot of time resolving conflicts, sometimes even seeking legal help. Today, often the tenant does not move out without a court decision. This disrupts the property owner’s normal daily routine, work and leisure. However, rental management can be smooth when it is taken care of by professionals. In this case, the landlord does not have to worry about late payments, tenant changes, minor faults or legal matters.

 

“After some time has passed since the beginning of our cooperation, the property owners who have appeared are very happy that they dared to give their property to professionals to manage. Our clients assure us: it was the best decision, because they do not have to deal with household and financial matters,” says M. Tarvydas.

 

Fewer worries, more peace of mind

 

Today, tenants also have high expectations for real estate. For example, if the washing machine breaks down, they no longer want to wait a week for a repairman to come and fix it, or live with a dripping tap. He does not hide the fact that tenants also have various expectations and choose their future, albeit temporary, home by considering several options. He inspects more than one apartment, and this requires an investment of time from those who want to rent it.

 

According to M. Tarvydas, the “Monto” team takes care of everything – starting from the selection of reliable tenants, concluding contracts and administration, ending with constant maintenance of the apartment, technical issues and quick response to problems that arise. The company also provides various additional services, for example, it can maintain a terrace or garden next to the apartment.

 

“For example, a future tenant comes, sees that the apartment is too small, and we can often immediately offer a larger one even in the same area. Or the tenant comes and says: I want an apartment with a panoramic view, next to a park. And we already know what to offer him,” says M. Tarvydas, the head of “Monto”, one of the largest real estate rental management companies in Lithuania.

 

Creating added value

 

Sometimes property owners are extremely skeptical about the services offered by real estate management companies. According to M.Tarvydas, it is still necessary to prove the added value of the aforementioned services. “If a real estate owner has not encountered the rental market, he does not understand how much time it will take to prepare a dwelling for rent: from communication, e.g., photographing spaces, preparing and placing an advertisement, meetings with future candidates, as well as selection to drawing up a contract and other important aspects. And what about various domestic problems or disagreements that arise after the tenant starts living there. Sometimes we have to prove to the homeowner that by paying us a certain fee, he will receive added value – he will save time, be able to devote it to his work or leisure, and at the same time, without him having to do anything, the dwelling will be rented out at the highest market price,” says the manager.

 

Takes care of rental and sales processes

 

In Lithuania, one of the largest real estate rental management companies “Monto” supervises more than 530 real estate objects in Lithuania and Latvia. The company's clients are both individual property owners and institutional investors managing large, exclusive and unique real estate portfolios. The company helps take care of real estate rental or sale transactions’ processes – from preparing the housing to finding tenants or buyers and long-term maintenance. The team formed in the company has excellent knowledge of the entire rental and property management system, and also has professional management, administration, lawyers, debt administration, marketing, and communication specialists. The total value of the assets managed by “Monta” today is more than 70 million euros.”