10 Biggest Mistakes New Landlords Make

So you made a real estate investment, and now you’re the newest landlord in town. That’s excellent news, but it’s crucial to realize quite a few pitfalls are waiting for brand new landlords who don’t know their way around the business yet.

Fortunately, many of these mistakes are avoidable for observant landlords with plans.

1) Not Screening Residents Thoroughly

One of the most significant and all too common mistakes new landlords make is not screening their residents thoroughly. Unfortunately, that can lead to all sorts of problems down the road, from damage to your property to late rent payments.

Check detailed references and always run a credit check on all potential residents. You won’t have to search far for horror stories of residents who landlords vaguely knew or knew as friends. However, it’s still worth using practical checks to ensure they’re credit-worthy.

2) Not Getting Everything In Writing

Another big mistake is not getting everything in writing. That includes the lease agreement, rules or regulations, and anything else you expect your residents to adhere to without fail. By having all details of your arrangement in writing, you’ll be able to avoid any misunderstandings later on.

Have a qualified attorney read your rental agreement to ensure it’s legal. It may come in handy later if trouble strikes.

3) Not Knowing the Landlord-Resident Laws

Another mistake new landlords make is not knowing the landlord-resident laws in their state. These laws vary wildly from one state to the next, so it’s essential to be familiar with the ones in your area. In addition, not knowing these laws can bite you later if there are any problems with your residents. Brushing up may sound boring, but it’s worth it.

4) Not Keeping Up With Maintenance And Repairs

Another mistake new landlords make is not keeping up with maintenance and repairs. That can lead to your property becoming run-down and eventually uninhabitable. Be sure to do regular inspections and address any issues as they come up.

5) Meeting Resident Demands Too Easily

Another mistake new landlords make is giving in to resident demands too quickly. While you want to be accommodating, you also don’t want to be a pushover. Be firm with your residents, and don’t let them take advantage of you.

6) Having Unclear Or Unrealistic Expectations

Another mistake that new landlords make has unclear or unrealistic expectations. That can lead to frustration on both your and your residents’ part. Set realistic expectations from the beginning and communicate them clearly to your residents.

7) Not Doing Regular Inspections

Another mistake that new landlords make is not doing regular inspections. That can lead to problems going undetected for too long and eventually becoming more significant. Instead, regularly inspect your property and address any issues as they arise.

Inspections and maintenance will keep your property earning for decades. Regular work is better than allowing projects to build up to unmanageable levels.

8) Not Enforcing Lease Terms

Another mistake that new landlords make is not enforcing the lease terms. If you don’t enforce the lease terms, your residents will start to think that they can get away with anything. So be sure to implement the lease terms and take action if your residents violate them.

9) Not Keeping Good Records

Another mistake that new landlords make is not keeping good records. That can come back to bite you later on if there are any problems with your residents. Keep perfect records of all communications with your residents and any repairs or maintenance you have done.

Being a landlord is a business venture requiring excellent paperwork and bookkeeping. However, disciplined landlords make superior returns! You’ll find plenty of great software to help you manage rentals, which is a big bonus.

10) Not Getting Proper Insurance Coverage

The final mistake that new landlords make is not getting proper insurance coverage. That can leave you vulnerable to a lawsuit if something goes wrong. So be sure to obtain and maintain the appropriate insurance coverage for your property and residents.

Insurance may seem pricey, but the horrible consequences that the policy protects landlords against cost a lot more.

Get Higher Returns

With experience, you’ll get better at being a landlord, especially when you start on a positive note. Staying organized and dealing with incoming problems and situations will keep you ahead of the game.

You have an opportunity to build large sums of equity using other people’s rent money. That’s a blessing and a massive responsibility because it’s their primary residence! So always treat your residents with professionalism and enjoy your passive income.

If you need help managing your rental property, be sure to reach out to our team!