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Common Mistakes Landlords Make!

Thinking about buying rental property? Today, I discuss 5 common mistakes that landlords makes. If you’re a current landlord, or thinking of becoming one, make sure you avoid these mistakes!

Most people don’t understand that if you don’t get the right mentorship, it could be a huge headache and cost you money if you are the landlord.  Owning rental properties can be very profitable…if you do it right & avoid these mistakes.

#1 Picking the wrong tenant.  Take your time and really look for a great tenant.  Do background checks.  Meet them at their current living space so you can see how they take care of things.  If you can’t do that, check out their car…is it maintained? It might be a good indicator if they are going to take care of your property.  Listen to your gut and don’t rush into it with a tenant if you are not 100% sure.  Having a tenant that doesn’t take care of things could cost you thousands of dollars in repairs, plus a painful eviction process and stress!  This is the number 1 top headache.

#2 Ignoring maintenance issues.  Remember this is your house, not their house, and if there is a maintenance issue and you don’t know about it to take care of it, it could grow into an even bigger problem and more costly to repair later.  Landlords that put bandaids on repair issues and don’t make the full repairs, will likely run into problems down the road.

#3 Sloppy Paperwork Trail.  This is a business, contracts are paperwork.  You have leases, you have to make sure you’re doing the books correctly… you can’t rely on promises.  A paper trail is needed in business.  Even at the end of the year, you need documentation to do your taxes.  You can’t remember if someone paid cash for something several months after the fact.  And if you need to take a tenant to court, you definitely need things in writing.

#4 Ignorance of Laws and Regulations.  Did you know there are professional tenants out there that know how to get around laws and stay in the home and not pay rent?  You need to know the local and state laws, plus rules and regulations.  Maybe you hire a property management company and pay them the 7 or 10% monthly fee to manage the process with legal documents and follow the rules and regulations.

#5 Investing in upgrades that will not actually give you more rental income.  It is easy to get caught up in having the nicest, coolest rental but the reality is you may not actually get enough extra money to offset that upgrade.  It is super easy for the new investor to drop an extra 10k or more in upgrades that really don’t matter.  Remember, it is a business and the upgrade isn’t for you.  It is a business and the goal is for you to be profitable.

BONUS #6 Being too kind. Some tenants will tell you a sad story to try and get accommodations from you… they’re trying to see who is their biggest bill and where they can get some relief and that might be you, the landlord.  If you get caught in the flexibility game, you can cause yourself stress.  If you know your heart is too big and might get caught up with this, then hire a property manager.

I hope this information is helpful to you if you are deciding to get into owning properties to rent or already have rental properties.  If you would like guidance in buying your first rental property, give us a call!  My team and I are on standby, 7 days a week, ready to help you take the smoother road to sold!

Are you thinking about selling? See what your home might be worth!

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