Most Common Mistakes by Landlords

One of the worst things that can happen to a landlord is having a tenant destroy your rental property. Even worse is not paying rent on time. These are things that landlords have no control over most of the time. Landlords do have control over not committing some of the most common mistakes.

1.      Not having a plan

2.      Not charging tenants for damage

3.      Becoming friends with tenants

4.      Only looking at properties when there is a problem

5.      Not having any reserve money set aside

I can’t express how important it is to have a plan. Most investors waste precious time deciding exactly what they want to do with a property. During the rehab period is the best time to start marketing your property for rent. Most people think it’s best to wait until the property is done before marketing campaigns are launched. The truth is whether you’re renting, or selling you want to start marketing right away. Plan for the worse, but hoping for the best is the attitude you will need to take.

If you’re a landlord you can’t be Mr. Nice Guy or your tenants will run all over you. Let them know in the beginning that wear and tear is expected, but they will be charged for damage. Fill out a move in inspection form and have your tenant sign it. You can find these forms all over the internet. In addition, video tape your investment property before the tenant moves in. Be sure to clearly show the condition on the floor/carpet and walls before move in. Take pictures of anything damaged after move out, and provide those pictures with copies of repair receipts to the tenant. I usually send this with a nicely written letter with all repairs itemized.

The hardest thing to do is evict a tenant after you have been out with them for drinks. Remember this is business not pleasure. Sometimes tenants will try and get buddy buddy with you because they know they may need those points later. The more professional you keep it the easier it is to evict or charge for damage.

It would be smart to evaluate the condition of your investment property inside/out every 3 months. A lot of investors only look at their property the day the tenant moves in, and the day the tenant moves out. By the time you realize the tenant is trashing your property it’s too late. Avoid that happening by looking at your property on a regular basis, especially dealing with section 8 tenants. You can tell the tenants that you will evaluate the property every 3 months or you can pull the old-“I have to check the smoke detector battery.”

Don’t get caught with your paints down. Depending on which rental contract you’re using; you may be responsible for certain repairs. Some of these repairs can be big or some of the repairs can be small. Imagine what the situation would be like if it were the middle of July, and your tenant called and said the AC unit just blew up. The tenant says “if you can’t get it fixed then I’m moving.” How hard do you think it’s going to be to rent a property with no AC in mid July? These are the things that you prepare for in case they happen. Being a landlord can be very interesting. I recommend hiring a property management company to do all the dirty work. The monthly fee is worth the service they provide. A landlord should be making somewhere around $200 a month off a good rental. Running the numbers to be sure they work will be the key to being successful in this business.