Common Mistakes Landlords Make

By E-Renter Tenant Screening
Posted on July 17, 2009 under Eviction, Landlord Tips, Tenant Screening & Background Checks | Be the First to Comment

Whether you’re an experienced landlord, or a “newbie,” you probably have your share of missteps made in your rental property business. And while some landlords make the same mistakes over and over again, you don’t have to be that guy or gal.

We’ve rounded up a list of common landlord mistakes so you can avoid them!

1. Not treating it like a business. Because it is! You are in the property rental business to make money, not to house the world at your expense. Establish and follow procedures, open separate bank accounts, keep meticulous records, get professional help when necessary, and project a professional demeanor to your tenants. As one landlord put it, “If you look and sound like you’re not serious, you won’t be taken seriously.”

2. Being too lenient on rent collection. Your tenants signed an agreement to pay you on a certain date. Don’t allow late or partial rent, or they will know you’re not serious about the due date. See mistake #1.

3. Failure to prescreen tenants. Don’t be in a hurry to fill a vacancy, or you could end up with an unreliable tenant—which is a much bigger problem than an empty unit. Have your employment checks, background checks and credit checks in hand before you sign a lease with any tenant.

4. Lack of understanding about operating expenses. There is more to owning rental property than collecting rent and paying the basics: principle, interest, taxes, and insurance. If you don’t have sufficient resources to cover regular expenses (maintenance, advertising, repairs) PLUS accessible funds to cover the occasional (but inevitable) major repairs, you are setting yourself up for failure.

5. Trying to do everything yourself. If you have only one or two properties to manage, you might be able to handle rent collection and upkeep. Still, you might need a handyman for maintenance. But if you have more than three rental properties, consider hiring a property management company for tenant screening and placement, upkeep, rent collection, maintenance, etc. Ask yourself what your time is worth. You may find the expense of a management company is well worth your freedom from stress.

6. Not having an exit strategy. Before you buy an income property, do your homework—including how easy or difficult it will be to sell when you need or want to. You never know when you’ll want out of a rental property, but the likelihood is that you will sell eventually.

7. Not evicting non-paying tenants immediately. Even if you properly screen tenants, anything can happen. If your tenants break the rental agreement by not paying on time, you can—and should—take the proper legal steps for eviction. See mistakes #1 and #2.

8. Being a hands-off landlord. Although you may have a property management company, no one will care about your rental properties like you do. At the very least, inspect your properties on a regular basis and stay in touch with your tenants. You’ll probably prevent a lot of damage and trouble just by following this simple step.