Being a landlord can be a profitable venture. Some people desire to own many properties while others fall into this line of work by accident. It is important to note that finding the right tenant can be tricky. Many new and long-time landlords can make mistakes that will cost them thousands of dollars. Here are the most common errors made by landlords when renting their properties.
8 Common Mistakes When Renting your Property
Being a landlord can be a profitable venture. Some people desire to own many properties while others fall into this line of work by accident.
1. Under or Overpricing the Rental
When renters are looking for the perfect home, they already know the prices in the area. If your home is priced too high or too low, then it can throw up a red flag. You do not want to cut yourself short on valuable income, but you do not want to price gouge either. The best way to find the going price for your home or apartment is by checking the market in your area. You can adjust for things like proximity to shopping, bus line, being close to great schools, and other contributing factors.
2. Doing a Poor Job at Marketing
Marketing a property for rent takes several steps. It is not as easy as putting a sign in the yard, especially if you want to get top dollar. Advertising on social media and other outlets can help you pull from a broader pool of people. Take great pictures and make sure to showcase large bedrooms, ample storage, and other key features. Some great tenants may overlook your properties if you do not market them accordingly.
Searching for a Property
3. Renting too Quickly
Everyone in Zetland is in a hurry to rent their properties and get the money flowing in. However, the problem with renting too quickly is that you may not have enough time to find the right tenant. Do not take the first person that comes with money in their hand. Set a time frame, like one week, and collect applications. After you have a pool to choose from, then you should make your decision.
4. Forgoing Adequate Screening
More critical than renting the unit is screening the applicants. A prospective renter can tell you anything they want, but you must back up all stories with facts. Call previous landlords at the very minimum as this will tell you a lot. Charging an application fee can help pay for credit and background checks. Find out anything and everything you can about these possible renters before they move into your home.
5. The Lease Is Not Adequate
You can go online and print out a lease that you fill in with pertinent information. However, these fill-in-the-blank forms are not always the best option. Take the time and money and have a lawyer draft up a legally binding document. As most landlords discover, there are times when you must go to court and fight to take control of your property. You want the best lease you can have to protect you in those times. The contract should cover extra fees, late rental payments, the right to evict, and about guests and pets.
6. Letting People Make Payments on The Deposit
Some landlords become desperate in the search for the right person and allow people to make payments. If a tenant does not have the money for the first month’s rent and a deposit up front, then do you want to rent to them? There is always heartfelt situations that may warrant generosity, but in general, never allow people to make payments for money they should have up front. It may be a sign that they have problems managing money.
7. Not Understanding Fair Tenant Laws
One of the most important things a landlord should do is familiarize themselves with a tenant and fair housing laws. While you may want to rent to a couple with no children, you cannot discriminate against those who have kids, a medical condition or are religious. You can find yourself in hot water if you violate the terms of fair housinglaws.
8. Ignoring Tenant’s Needs
Lastly, being a landlord is a full-time job. Tenants may have issues in the middle of the night and need to call you. If you need help, then you should consider hiring a maintenance man or property manager to handle the day in and day out business. If you ignore maintenance needs or tenants’ concerns, you may find yourself in court.