Although becoming a landlord sounds easy, it’s not always the case. There is more to owning property than buying a home, renovating it, and renting out the place.
If you lack the experience, you might lose money, sleep, and time by making these common landlord mistakes.
1. Ignoring the Importance of Marketing
Irrespective of how right your property is, you still need to market it well. You should take some time to list your parcels if you want to get noticed.
Remember that dozens of properties are looking for attention. Consider learning the principles of a successful property listing.
Also, create a catchy title that highlights your property’s strengths and provides an accurate description.
2. Not Understanding Your Local Market
You probably know that location is a significant consideration when venturing into property management, but you always ignore it.
Landlords should find rentals in desirable areas that can attract potential tenants.
Take some time to learn the neighborhood dynamics, including access to retail stores and recreational facilities.
Remember to research area taxes before determining what you should charge for rent.
3. Not Screening Potential Tenants
Although you have been anxious to find a tenant, you shouldn’t rush without checking their credentials.
Have a system in place from the onset with the necessary procedures for screening your tenants.
Whether you are renting out the home to your cousin or a stranger, you shouldn’t skip any of the steps.
You should also have a set of questions to ask every prospective tenant and a rental application form.
4. Always Sticking To a Fixed Price
Understanding the value of your property is essential. However, lacking flexibility when the rental market is slow might cost you money.
You might experience an increase in the vacancy rate. As a smart landlord, you should respond to significant rental changes and extend your limits.
Consider giving discounts when the market is slow and increase them during the hot season.
5. Underestimating the Cost of Property Maintenance
If you want to keep your tenants interested in the property, you have to maintain it. Make sure that you factor in repair and maintenance expenses in the rent.
Also, set aside some money to cater for emergency repairs.
6. Skimping On Insurance
The first thing that landlords should do before finding tenants is to obtain proper insurance coverage.
It should be the right type and cover the required amount. For instance, property insurance cautions you from the loss incurred when your property is damaged.
Also, every landlord needs to have liability insurance to protect them in the event of a lawsuit.
7. Neglecting Tenants
The home you are renting is your responsibility.
If you don’t check on your tenants and the property’s condition regularly, you have yourself to blame if anything is amiss.
However, make sure you don’t violate your state’s laws regarding tenant privacy before you visit them abruptly.
8. Treating the Property as Your Home
Most first-time landlords make this mistake because they aren’t accustomed to the task.
They assume that the property is their home and make decisions based on their personal preferences.
Although switching perspectives might be challenging, it is imperative. Decorate the property using neutral colors and trends to suit many tenants.
9. Charging Too Much Rent
It’s human nature to try to make as much money as possible.
However, you should be reasonable and think about it from a bigger perspective.
Avoid increasing your rent dramatically, even if you recently renovated the place. It’s better to rent out the house to quality tenants quickly instead of waiting for better offers.
If you have a hard time establishing a fair price, you can settle for an average price and adjust it later.
10. Not Understanding Landlord-Tenant Law
Take some time to understand the landlord-tenant law.
Otherwise, you might get yourself into big legal trouble by not fulfilling some responsibilities or following specific procedures.
Every state and country has a set of rules to follow when collecting security deposits, maintaining the property, and evicting tenants.
Breaking these rules might result in the loss of the entire security deposit.
Property management isn’t rocket science; all you need is experience and knowledge to become a successful landlord.
If you prefer learning from other people’s experiences, consider avoiding these common mistakes. It will help you beat the competition, maintain customers and make good profits
About the Author: Ray is a sought-after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.
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