Becoming a landlord can seem like an easy way to make money, but it’s important to know what you’re getting into before you ever start. Here are some of the most common rental mistakes and how you can, even as a first-time landlord, avoid them completely.
Not Running Checks on a Renter
They seemed nice enough, but the renters you were excited to have on your property a few weeks ago are already getting noise complaints from the neighbors, have trashed the place, and may even be thinking of skipping out of their rent.
Don’t pass over background checks because someone looks nice or because you have a good feeling about them. Everyone needs to be treated the same way because you have no idea what a stranger may be planning to do. When you have a clear idea of their history, though, you will be able to ask yourself if it’s really worth giving them a chance.
Not Having Money Set Aside for the Mortgage
Once you get the property, thinking someone will rent it immediately and that it will always stay rented is a bit of a pipe dream. This is why you have to make sure before you buy or get a mortgage on the property that you can easily make the payments yourself if need be.
Relying on Promises
Unfortunately, a promise or a handshake does not hold the same weight with every individual or in every state. This is why everything (and we do mean everything) you decide between you and your renter should be in writing. This way there also won’t be any question about who said what because it will all be there in black and white.
Not Knowing Your Laws
Choosing to rent your property out can actually be quite difficult, and those who are not fully familiar with the law when renting can get themselves into serious trouble. For example, if you ask certain questions during the interview that could be construed as discrimination, you might immediately give someone the right to sue you. If your property doesn’t meet the legal housing codes, the same could occur. Make sure you know exactly what is required of you by law and hire a lawyer who can help you figure out the rest.
Underestimating the Need for Maintenance
Whether you need to bring a property up to code or your tenants are requiring maintenance, you should never underestimate the time—and money—this part of the business will require. If you do, you will find yourself in way over your head.
Not Taking It Seriously
Being a landlord is not something you can do to make extra cash. For most people, it is a full-time job, and choosing not to think of it this way could be the most dangerous mistake of all. When you decide to rent out your property, you will need to take the task very seriously and make sure you have the time, money, and resources necessary in order to keep yourself afloat.
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