5 Mistakes You Should Never Make as a Landlord
Being a landlord has its serious perks. If you own the rental property, than you have a pretty great financial investment. If you were hired on as a landlord for an apartment complex, then you might be living rent-free or at a discounted rate.
Either way, it’s a pretty cool win.
However, being a landlord means that there is a lot of responsibility on your shoulders, so you better take it seriously and get your ducks in a row.
You need to ensure that you find top quality tenants, and you also need to take care of the property and make sure that rent is collected smoothly. You are responsible for the upkeep and maintenance of the place, which is a big deal.
Considering all of those responsibilities, here are five mistakes that many beginner landlords make—that you should do everything in your power to avoid.
1. Don’t forget to take out rental insurance…
If you don’t work for a major property management company, it might be up to you to figure out rental insurance – this is especially true if you own the rental property. Yes, rental insurance will cost you money, but it might save you money in the long run if you end up needing it.
You can also get rental insurance that will cover things like a new water heater or if you have to call pest control for a cockroach infestation (a property inspection can usually spot these things, so hopefully that was taken care of long before anyone moved in).
It can seriously hurt you to not have the protection that insurance provides, so make sure to get it.
2. Make sure to get everything figured out…
Paperwork is a pretty big deal at the beginning stages, especially when you’re finding tenants. From performing background checks and running credit checks to drafting up the lease and deciding on a deposit, everything important needs to be in writing and signed by all parties.
If your tenant destroys the rental unit and then wants to move out, you will have to hold their deposit to take care of the maintenance. Without that money, it would come out of your own pocket (assuming you own the place, that is). You need to also make sure that you actually check the references they list on the application, because you might be able to avoid a bad situation if you do.3. Be firm with your tenants…
Being a people person is one thing, but allowing your tenants to walk all over you is another. As a landlord, you need to strike a balance between being friendly and being an authority. You need to be very clear and firm about the rules of the property and how things like rent will work. Make sure the tenants understand when rent is due, what happens if it is paid late, and the general rules of the building. If a tenant breaks any of the rules, you need to take action.
4. Don’t ask advice from the wrong people…
If you are just starting out and you aren’t really sure what to do, don’t ask for advice from people who really have no idea what they are talking about. Just because someone watches reality TV about the housing market does not mean they know anything. Try to get involved with local real estate groups and speak with landlords and rental property owners who have actually experienced success.
5. Keep good tenants happy…
If you have managed to wrangle dream tenants, you need to make sure that you keep them happy. Don’t blow it. This does not mean that you should cut corners or be super lenient on the rules, but it does mean that you should make some allowances if they are reasonable. Do the tenants really want to paint the kitchen a shade of yellow that you hate? You should probably let them do it. After all, painting over it when they leave (though hopefully they never will) is not a big deal at all. Maybe they call you up and say that they will be a couple days late in paying rent, but they have always been early in the past.You should probably just waive the penalty and let them pay a couple days late. Make sure they know that you are doing them a favor, but let it slide the one time. If you keep the good ones happy, they will want to stick around.
Avoid these mistakes and make your landlording endeavors more successful than ever.