Nobody does their job perfectly—even experienced landlords.
When you’re dealing with such a volatile market, working in real estate can be stressful. Unsurprisingly, this stress can lead to making careless mistakes.
Although it happens to the best of us, these mishaps can be costly and time consuming for property owners. If you want to improve your rental strategies, read on for four mistakes to avoid as a landlord!
1. Taking On Too Many Responsibilities
As a landlord, you’re probably used to being in charge of maintenance. While it’s true that most people take care of their own properties—this can become challenging when you’re in charge of multiple rentals at once.
Spreading out maintenance responsibilities will reduce your to-do list, and result in faster response times to tenant requests. Some examples of professionals you’ll want to have on-call include:
- An electrician
- A plumber
- An exterminator
- A live-in supervisor
The Bottom Line: You only have so many hands. Leave larger repairs to the professionals so you can focus on landlord duties.
2. Not Having a Savings Account
Accidents happen. When you’re managing homes for other people, it’s important to prepare for the worst. This often means having a savings account set up in case of emergencies.
Keeping money tucked away can help protect you from financial ruin in the event of unforeseen circumstances, such as:
- Broken appliances
- Unexpected evictions
- Missed rental payments
- Legal fees
The Bottom Line: Landlords are expected to pay for a lot. Have a savings account that’s strictly for property emergencies, so your checking account doesn’t have to suffer should something go wrong.
3. Rushing Your Tenant Screening Process
A big part of rental property management is choosing the right tenants. When you’re trying to fill a vacant space, it can be tempting to rush the screening process along. Unfortunately, making this mistake can have lasting consequences.
A proper tenant screening should include the following information:
- Employment and income verification
- Credit report
- Criminal record
- Rental history and previous landlords
The Bottom Line: Avoid renting to the wrong people. Conduct a thorough tenant screening prior to trusting a stranger with your property.
4. Pricing Your Property Too Low (Or Too High)
Choosing the right rental price is key to succeeding as a landlord. That being said, it takes some number-crunching to find a price that works for you and your tenants. When deciding this figure, you’ll want to take three factors into consideration:
- Profitability – Being a landlord is a job—and with any job, making money is important. Calculate your monthly costs—such as mortgage payments or other property bills—then add however much you want to make as an income to get a total. This will ensure you actually profit from your rentals.
- Affordability – Making a profit is important, but running up too high of a rental price can leave you with vacancies. Understand that renters can only afford so much and take your property value into consideration when determining the monthly rent. A tenant paying a lower cost is better than no tenant at all.
- Averages – Research the average price of rentals in your area via real estate listings. While you don’t want to undersell your property, it’s also important to be competitive in this difficult market.
The Bottom Line: Take time to get an accurate value on your property and perform thorough calculations from there. A good rental price should be profitable, without being outrageous.
Landlords Make Mistakes… but some mistakes are avoidable.
Renting out properties is a tricky process. Remember that each new tenant will come with a learning curve, and it’s okay to mess up sometimes. Take each mistake as a learning opportunity and use these lessons to better your career over time.
And don’t forget to properly screen your tenants. It’s important not to rush the vetting process because you don’t want to end up with renters who won’t take care of your property. Give yourself adequate time to review applications and interview prospective tenants.
Use these tips to run a profitable rental venture! Happy renting.
Article Submitted By Community Writer