Are you struggling to let your property successfully and generate a good return on your investment? If so, you’re not alone. There are several potential solutions to remedy the situation, but one of the most definitive is to learn from those who have gone before you and to ensure you avoid the mistakes they made. This article will cover some common landlord mistakes to avoid.
Although generating revenue from a rental property is typically described as passive income, the work behind the scenes to make this possible is far from passive! Anyone who has owned an investment property before knows that there are plenty of moving parts, and a few wrong decisions can quickly lead to financial disaster.
That said, if you are a new landlord looking to ensure that their rental property is a success, here are some of the top landlord mistakes to avoid, so you can manage your rental properties effectively and avoid costly errors.
6 Landlord Mistakes to Avoid
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Failing to Conduct Thorough Tenant Screening
One of the biggest mistakes that newbie landlords make is failing to conduct thorough tenant screening. This can lead to problematic tenants who don’t pay rent on time, damage the property, or make your life more difficult. If you don’t conduct tenant screening, the wrong tenants may move in and cause you a headache.
That’s why it’s important to take the time to vet potential tenants before renting out your property.
To conduct effective tenant screening, start by requesting references from previous landlords, as well as employment and income verification. You may also want to perform a credit check to ensure the tenant has a history of responsible financial behaviour. Finally, be sure to interview potential tenants in person to get a sense of their character.
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Neglecting Property Maintenance and Repairs
Another common landlord mistake to avoid is neglecting property maintenance and repairs. Failing to keep up with regular maintenance or fixing problems when they arise can be a costly mistake, as any neglected issues can worsen over time and become even more expensive to fix.
By taking the time to inspect your rental property on a regular basis, you can identify any potential problems early on and make sure that they are addressed before they get worse. That said, it helps to create and stick to a regular maintenance schedule. This can include checking smoke detectors and carbon monoxide detectors, testing sump pumps, cleaning and inspecting the HVAC system, inspecting plumbing fixtures, and more.
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Not Setting Clear Expectations and Guidelines
When renting out your property, it’s important to establish clear expectations and guidelines for your tenants. This can help prevent misunderstandings and ensure everyone is on the same page.
To set clear expectations, create a comprehensive lease agreement that covers everything from rent payments to pet policies. Be sure to discuss the agreement with your tenants before they move in so they fully understand what’s expected of them.
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Overlooking Insurance Requirements
Another mistake that newbie landlords make is overlooking insurance requirements. Having the proper kind of insurance coverage is essential in protecting yourself and your rental property from potential risks or liabilities.
Having adequate property insurance will protect you if your rental property sustains any damage due to an unforeseen event. You may also want to consider liability coverage if a tenant or visitor has an accident on your rental property.
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Not Collecting Security Deposits
Collecting a security deposit is a common landlord practice, as it can provide some financial protection in the event of unpaid rent or if your tenants cause damage to the property. However, many newbie landlords neglect this practice and end up regretting it when they are stuck footing the bill for any rental damages.
Be sure to collect a security deposit from each tenant before they move in. The security deposit amount will vary depending on your local laws, but typically it’s the equivalent of one month’s rent.
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Failing to Respond to Tenant Complaints and Concerns
Another common landlord mistake to avoid is failing to respond to tenant complaints and concerns. It’s important to be responsive when your tenants reach out with a problem or an issue, as this shows that you care about their living experience and want to ensure they’re taken care of.
Take the time to respond promptly and professionally whenever you receive a tenant complaint or concern. This can help prevent minor issues from escalating into bigger problems that can be more difficult (and costly) to resolve.
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Lack of Knowledge of Rental Rules and Regulations
Finally, another mistake first-time landlords often make is failing to get up to speed on local rental rules and regulations. It’s important to familiarise yourself with all applicable laws governing rental properties in your area to understand what’s expected of you as a landlord.
As the saying goes, “Ignorance of the law is no excuse”. Failing to follow the rules and regulations can lead to steep fines or even legal action. So, take the time to educate yourself about your local rental laws and make sure you comply. You may also want to seek advice from a professional letting agent.
How Partnering With a Reputable Property Management Agency Can Help You Avoid These Landlord Mistakes
While it’s important for landlords to know how to manage their properties effectively, it’s also worth considering partnering with a property management agency. These agencies specialise in managing rental properties and can help landlords avoid making the mistakes we’ve discussed.
First and foremost, property letting and management agencies have a thorough understanding of rental rules and regulations. Your letting agent can help ensure that your property complies with all legal requirements, which can help you avoid costly legal issues down the line. Additionally, property management agencies can assist with tenant screening, handling tenant complaints, and managing security deposits, which can help alleviate some of the stress associated with property management.
Another advantage of working with a private client property specialist. They can create a maintenance schedule, handle repairs, and conduct routine inspections to ensure your property is always in top shape. This can help you avoid neglecting property maintenance and repairs, which can be costly in the long run.
All in all, partnering with a letting agent for landlords won’t just help you avoid these common landlord mistakes, but it will also help free up your time to focus on other ventures while boosting the return on your investment. Of course, working with a property management agency does come at a cost. However, many landlords find that the benefits outweigh the cost, particularly if they own multiple rental properties or have limited experience in property management.
Partner With Chambré to Avoid Common Landlord Mistakes
While it’s certainly possible to manage your rental properties on your own, partnering with a private client property specialist like Chambré Property Management can help you avoid the common mistakes we’ve discussed and boost your return on investment.
At Chambré, we provide a comprehensive range of services tailored to your needs and designed to make the property management process as stress-free as possible. Whether you’re looking for assistance with tenant screening, property maintenance, or legal issues, our experienced team of property managers can help. Get in touch with us for more information.
FAQs
- What are some common landlord mistakes to avoid?
They include neglecting property maintenance and repairs, failing to properly screen tenants, not understanding rental rules and regulations, overpricing rent, and failing to maintain good communication with tenants.
- Why is neglecting property maintenance and repairs a mistake?
Neglecting property maintenance and repairs can be a costly mistake in the long run. Minor issues can quickly become major problems if left unchecked, and failing to promptly address maintenance and repair issues can lead to dissatisfied tenants.
- How can I stay up-to-date with rental rules and regulations to avoid legal issues?
Staying up-to-date with rental rules and regulations can be challenging, but there are resources available to help. It can be helpful to consult with a property management agency or a real estate attorney and regularly review relevant legal resources such as landlord-tenant laws and local regulations.
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