Inexperienced landlords tend to make a lot of mistakes when they manage their own property. There are seven specific mistakes that are most common, and these are things you should try to avoid when you have a house on the rental market.
Not screening tenants properly is a huge mistake. Sometimes, people are so anxious to get anyone into the property that they don’t look carefully at things like credit, background and past evictions.
Upgrades and Repairs
There is no reason not to fix up the house before putting it on the market. Whether you have a house the city or a large home out in the suburbs, you want the house to stand out. Make sure it looks appealing to prospective tenants.
If you don’t have your property up to city codes, you’re asking for major financial problems. This is a mistake that can cause a lot of liability for owners, so make sure your property meets all the necessary local, state and federal codes.
A major mistake is not starting that eviction process on the first day that rent is late. You have to do it. Even if you’re going to give the tenant the opportunity to pay rent that’s late, get the process started as soon as possible.
Forms and Paperwork
Landlords use a lot of improper forms. Each state has its own specific forms that you are required by law to provide your tenants. For example, the lead free booklet is something you need to make sure the tenants receive. The lease you use also has state-specific requirements, right down to the type size that is used. Many landlords buy generic leases online, and that the lease you purchase may be against the law.
Low Rental Prices
Clearly, a property that’s priced too low is not going to make the maximum amount of money for the owner. Pricing your home under market is a major mistake that affects your pocketbook.
There are a number of mistakes that can be made with security deposits. Using that money for your own personal needs is a big one, as well as not using a trust account. Another mistake is not taking a big enough security deposit. Landlords who charge only $200 or $300 could be hurting themselves. Usually this is something that apartment complexes do when they’re competing with other buildings, but with the market as strong as it is, there’s no reason for that. Finally, you don’t want a tenant who can’t afford to pay up front. It’s a mistake to allow someone to pay half their security deposit now and half later. Get all the security deposit and the first month’s rent before they move in.
These are the seven most common areas that landlords make mistakes. If you want to avoid these expensive errors, contact us at United Properties for help.