Table of Contents
- Lacking Preparation To Make A Lease Agreement
- Running Only Occasional Property Inspections
- Failing To Budget For Property Vacancies
- Assigning The Wrong Rental Fee
- Delaying Evictions And Legal Actions
- Failing To Conduct A Credit And Background Check
- Ignoring Renters Who Are Not Compliant With The Lease Agreement
- Failing To Account For Time
- Bottom Line
To non-landlords, it may seem that investing in real estate and managing a rental is a breeze. You just need to pick a good property and collect the rent each month. However, operating a business requires objectivity, patience, and hard work.
It’s easy to make mistakes, especially for new property owners. To prevent costly mishaps, it is best to research the common missteps landlords make to avoid consequences, which can turn costly.
Here are some mistakes you should avoid as a new landlord.
Lacking Preparation To Make A Lease Agreement
Inexperienced landlords may think that written lease contracts are unnecessary, especially if you have good relations with your tenants. Unfortunately, not having one can lead to potential conflicts. Rather than verbal agreements, it is best to have rental terms and conditions in writing.
Your lease can offer protection since the court accepts it as evidence in case a renter files a lawsuit against you. The agreement can also be a good reference point for renters if they need specific information. You can reduce answering repetitive queries.
Running Only Occasional Property Inspections
It is always a great practice to inspect your property regularly. This is the best way to spot potential damage so you can arrange for repairs without spending a lot.
Landlords are also responsible for creating a livable space and maintaining the property. They must ensure rental safety and functionality of home systems.
Even if the property issues seem minor, it is always better for landlords to address them as soon as possible. You want to encourage renters to renew their leases and to make sure this happens, you need to be a proactive landlord.
Failing To Budget For Property Vacancies
A vacant rental is part of owning a property. When this occurs, landlords will still need to spend on maintenance costs on top of marketing fees to attract new renters.
Not budgeting for a rental vacancy can leave you struggling when one occurs. This can lead you to rush to take a poor-quality tenant just to fill the space, which can end up costing you more in the long run.
Having a budget that can cover at least three months of vacancy is a good rule of thumb, so you won’t compromise your tenant standards, which can end up creating stress. To effectively fill a vacancy, you must perform tenant screening and create criteria to ensure you accept the right type of renter and avoid tenant problems.
Assigning The Wrong Rental Fee
Determining your monthly rent must be done carefully. You must learn to review critical factors and make an analysis to avoid potential investment losses. As a landlord, you must be updated with the news and check the current state of the economy and rental market demand.
Go over several property listings and review the current rental prices of similar properties in your neighborhood. Check for any new infrastructure being built in your area. See what type of amenities are sought after and consider that in your rental pricing.
Delaying Evictions And Legal Actions
When renting out your house alone, you can end up being very lenient with your renters. You may have built strong relations and while this is commendable, it can be hard to set a landlord-tenant boundary, which can cause problems. Some renters might ignore your property policies or skip paying the rent on time.
Remember that your rental is a business, and that tenants must respect the lease agreement by paying the rent on time and observing the property rules. When they continue to break the rules despite warnings, then you should consider evicting them to cut your losses.
Failing To Conduct A Credit And Background Check
DIY landlords can also neglect to review a renter’s credit and rental history, which inevitably leads to future problems. This can be an exhausting task, but ensuring that your rental is occupied by a trustworthy tenant is worth the trouble.
Ignoring Renters Who Are Not Compliant With The Lease Agreement
Rental agreements are crafted to ensure everyone’s safety and reduce property risks. DIY landlords must be firm in enforcing the lease to avoid dealing with potential issues.
If renters don’t respect the rules, it can introduce potential accidents and safety risks. Make sure that you and your renters are on the same page and that the rules outlined in the lease agreement are honored.
Failing To Account For Time
As a new landlord, you might think that you can handle a full-time job and self-manage a rental at the same time. However, there might be emergencies in your rental that warrant a quick response. You may be busy working or may not have enough time to manage urgent cases.
It is best to engage the services of a trusted property management company to limit costly repairs and address property issues and tenant concerns. Juggling a lot of daily tasks can lead to stress and reduce your personal time. Hiring property managers can save a lot of time and prevent mistakes.
Bottom Line
Self-managing landlords may commit mistakes but learning the best practices can reduce potential problems that can end up being expensive to correct. If you want to delegate your landlord responsibility, consider hiring competent and reliable property managers, such as JTS Property Management.
Investing in their professional services ensures your property is taken care of and your tenants are managed well. Contact JTS Property Management today
