Typical Landlord Mistakes and How to Avoid Them
Owning a rental property has both its pros and cons. Everyone is bound to make some mistakes along the way. Don’t beat yourself up! Learn from these typical landlord mistakes to avoid the hassle when renting out your property.
Read about and learn from these mistakes. You’ll thank us later!
Here are a few common mistakes that are made by Landlords (and sometimes even Property Managers!) and ways to avoid them!
Tenant Mistakes
You can’t live with them and you can’t live without them! Not just a motto familiar to those with spouses! When dealing with rental properties, this is an area where you cannot allow yourself to become lax. Just like a potential marriage, if you do not spend enough time determining whether the person will be a good fit, you could set yourself up for some heartbreak. Don’t be in a rush because you’ve been single for a while and you are desperate! You may think that a vacant property is the worst possible outcome, but the wrong tenant could cost you even more money than just lost rent.
How to avoid this?
Come up with a fierce system to screen all of your tenants prior to signing a contract. That includes great interview questions, credit checks, references, etc. Use every tool at your disposal. Credit checks are a helpful tool to assess your prospective tenant’s ability to pay, but don’t forget to call previous landlords and even employers to get a better picture.
Eviction Mistakes
While we are about unreliable tenants, we will admit that sometimes staving off the eviction process can be a mistake. We get it, they violated the lease, but they had a bad breakup, their parent died, their child had an unexpected medical expense… You want to make a concession for them, but “just this one time”. Unreliable tenants can be one of the biggest problems when owning a rental property. Trouble is, you will likely create even more friction between the two parties when the next late payment story inevitably comes. If you don’t have the heart to evict with the first breach of contract, don’t make the same mistake twice. If you wait too long, you may have a tenant who takes advantage of you to the point where they are literally squatting.
How to avoid this?
Start the eviction process right away. As the owner of the property, you have the right to terminate a rental agreement when payments are not being made. It is not your responsibility to make sure payments are made on time.
Maintenance Mistakes
Procrastinating
Putting off maintenance or technical issues is not just frustrating for the tenant, but it can also cause you more grief in the long run. The longer you wait, the more problematic the issue becomes.
Underestimating Maintenances Costs
Assuming the maintenance issue can wait when it can’t is one mistake, but assuming the maintenance issue is affordable when it’s not is another! If you haven’t already, start putting money aside for maintenance and other “emergencies”.
How to avoid these?
- Tend to maintenance requests and issues right away. Anticipate that they will come and try to keep up with them before they become problematic. Not only do you save yourself time and money in the long run, but further issues will be prevented.
- Budget for maintenance. Don’t assume that just because you have enough money to cover the mortgage, you’re golden. You will need to have some money set aside for regular maintenance to keep things running smoothly and for emergencies that will inevitably come up.
Cash Flow Mistakes
Not treating your property like it is a business is more common than you think. Do not take the passive approach when renting out your property. Some treat renting out their property like it is a side job which makes it hard to stay focused and get the most out of their investment.
How to avoid this?
Become invested in educating yourself, marketing, and maintaining your property.
Verbal Agreements Mistakes
Never rely on verbal agreements. It is in our human nature to be trusting of someone, but you can still be trusting and have everything down in writing.
How to avoid this?
Get EVERYTHING (yes, everything) in writing/documented.
Legal Mistakes
Unrightfully keeping security deposits, inadequate property insurance, ignoring right to privacy, asking discriminating questions. These are just a few examples of legal mistakes that landlords make.
How to avoid this?
Make sure that you and your rental agreements abides by state law.
Asking Family/Friends for Advice
Everyone has their own opinions and ways of dealing with things. Unless your friend or family member has been in the business for several years and been mostly successful, take their advice with a grain of salt.
How to avoid this?
Don’t seek out advice from those outside the industry. Skip the confusion and talk to the professionals! Consider hiring one if you want to free up your time to invest in more properties. Property managers have the experience and knowledge to help you. If you want to avoid the hassle of all of these rental property mistakes, hire us as your dedicated property manager.
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