Ah, the wonderful world of owning rental property. While it can indeed be a money-making venture that can build wealth over time, it’s an endeavor that should not be entered into lightly. There’s no place in the world of land lording for a ho-hum, whatever-whatever attitude or approach. And the folks who jump headlong into property management thinking, “How hard can it be?” will get their answer rather quickly.
Steering clear of these common landlord mistakes will propel the determined landlord toward success.
- Deferring property maintenance
Little, minor concerns can quickly become major issues when left to their own devices. An “I’ll-worry-about-it-later” approach will almost certainly cost more in the long run than if the repair were to get underway ASAP. If it feels as if there’s always something that needs your attention, welcome to property management. Convince yourself that staying on top of repairs will best serve you.
- Assuming all properties will always be rented
X number of properties times X amount of monthly rent equals gross monthly receipts, the same every month. Simple, right? Except when the tenants in unit #5 move out at night, leaving a royal mess. Or the pipes in unit #3 burst the day before new renters are scheduled to move in. Not a pretty picture, is it?
Things will happen—multiple things even—to impact the number of rent fees collected each month. And if meeting the mortgage payment requires 100% collection of rent payments every month, that scenario is headed for disaster. Factor in the unexpected by setting aside a portion—possibly 10%—of each month’s rental income. And infuse your expectations with a dose of reality by anticipating a one-month vacancy for each property each year.
- NOT thoroughly screening tenants
A landlord may be tempted to skimp on the tenant screening process for any number of reasons, including—
- They seem like a nice, friendly family.
- The landlord has known the potential tenants for X years.
- The screening process takes too long, and getting the property filled seems more critical.
The Dutch proverb “An ounce of patience is worth a pound of brains” seems highly appropriate to the tenant screening process. So does Ben Franklin’s timeless phrase, “An ounce of prevention is worth a pound of cure.” Make the wise decision to be thorough every time.
- Meeting tenants’ demands too readily
It’s one thing to be accommodating. It’s another situation entirely to be too easily swayed. Being too nice and letting tenants take advantage of you will result in a “pushover” situation that can quickly take on a life of its own. By all means, maintain a cordial relationship and always live up to your part of the landlord-tenant agreement. But firmly uphold the policies and rules detailed in the lease. This means assessing late fees, enforcing the no pet policy, etc. From day one, strive to strike a balance between friendly and firm.
Taking care not to make these four common mistakes will ensure a much better rental investment experience.
About Rentals America
Rentals America provides full-service property management for residential rental properties. Our team is completely dedicated to property management and we’re here to help landlords navigate the rental market.
