Becoming a DIY Landlord? 7 Mistakes to Avoid
No matter the industry you pick, you can always find a few individuals who prefer the DIY route. This covers rental property management, too. Self-managing your rental can present a ton of risks and you need to put in a lot of effort in managing the responsibilities of a landlord. You also need to learn how to handle tenant complaints and keep up with the maintenance of your property.
For new landlords, mistakes can happen often. Keep an eye on this common errors to help you succeed as a DIY landlord:
1. Lack of a Written Lease
Simply relying on verbal agreement can backfire when you find yourself in a conflict with a tenant. Having a lease keeps you safe since this can be accepted as valid evidence in court if a renter filed a case against you.
With oral agreements, it can be difficult to prove and the burden of proof lies with you. A signed contract is binding and terms and conditions are clearly stated, limiting disputes. Without a rental agreement in your hand, you’ll find it difficult to instruct renters to comply with a set of policies.
When
creating a leasing agreement, make sure to consult a legal counsel or engage the services of a property management company to ensure that policies are aligned with state and local laws.
2. Limited Property Inspections
Since the landlord’s main task is keeping the rental space habitable, you need to perform your duties in
maintaining a livable unit. Provide water supply and trash bins. Have security measures in place and double check on property issues and tenant maintenance requests.
The more well-kept your rental space is, the more you end up with happy tenants. Keep in mind that renters also have their own responsibility in
keeping a well-maintained space.
3. Keeping Marketing Vacancies at the Bottom of Your Priority
Tenant turnovers happen and as a landlord, you need to deal quickly by marketing your vacant unit. While looking for quality renters, you’ll be spending on advertising and maintenance costs so you should have a reserve budget set aside.
Opting to be a DIY landlord means attending to property showings, preparing your unit to be rent-ready and implementing marketing strategies.
4. Failing to Decide on Evictions
Self-managing landlords can find it tough to evict renters since it’s hard to establish a boundary, unlike with a professional team. This can lead to drawbacks on the part of the property owner since rules can end up not being followed. You might also not collect for late fees even if it’s stated in the leasing agreement. In the end, your rental income is less optimal.
It pays to be firm as a DIY landlord. Make sure that renters adhere to the due dates and collect for late fees when it’s on the agreement. Then if a renter stops paying the rent, go through the eviction process legally. If not, your rental business won’t be a success.
Consider hiring a property management company who is experienced in handling situations in a legal manner. They ensure that the lease is followed and evictions are done properly.
5. Failing to Conduct Background Checking
DIY landlords can fail to be
thorough in screening tenants at times. While it can mean less work at present, it can lead to huge problems in the future and cleaning up after the tenant. It’s best to verify the employment and income to guarantee that they’re capable of meeting the rent dues each month.
Review the credit score and check for outstanding payments which can reduce disposable income. Connecting with previous landlords can also shed light on the past behavior of the renter. If the tenant left a property with no damage then you can expect that your unit is equally treated in the same way. Always run a detailed tenant screening to prevent financial losses.
6. Failing to Consider the Time Value
How much time do you have to spare in managing your rental place? If you only have a short period of available time, it’s best to allow a professional property management company to take over your duties.
It can be challenging to juggle the daily tasks of a landlord and place the rental at risk for tenant complaints and potential property damage. Your responsibility multiplies even more when you have to take care of more than one unit.
Having a full-time support system can make your rental operation efficient. There will no longer be delays in property repairs and vital tasks are completed. The better the upkeep of your rental place, the more likely
renters renew their lease.
Learning to manage a rental on your own is praiseworthy. But you need sufficient time to get good at that role. Your mistakes can end make tenants design to no longer renew their tenancy.
7. Forgetting to Inform the Renters of Lead-Based Paint Disclosure
If your rental is built before 1978, you must disclose this to the renters with a warning of potential lead paint. Otherwise, you’ll pay a hefty fine.
Bottom Line
It’s understandable for new landlords to make mistakes but some of these errors can end up emptying your budget. Going the DIY route means having the extra time to increase skills and knowledge in managing a property. It can be a time-consuming option, too.
You can consider outsourcing the task to a property management company. Investing this way can reduce your worries since a professional team is always available to deal with the varied situations. Enjoy your passive income and let a competent team take over the rental management.
Contact First & Main Property Management today if you’re seeking help in limiting landlord mistakes. We’re also available to help find quality renters, run a detailed tenant screening, collect the rent on time and maintain your property in a top-notch condition.
