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Whether you’ve been renting properties for decades or are thinking about starting the process now, you can save yourself a lot of trouble by avoiding common pitfalls. Managing properties is a costly, time-consuming process, one that can mean a lot of headaches over time. So what can landlords do to improve the experience? What are the mistakes to avoid?
Here are five to consider:
- Renting Poor Properties: Just because you find a cheap property doesn’t mean it will make a good rental. If it’s in disrepair, in an undesirable neighborhood or in a poorly rated school district, all of these factors will harm its desirability to potential tenants.
- Not Checking Credit: One of the biggest headaches a landlord faces is chasing down monthly payments. This is why savvy landlords perform standard credit checks on potential tenants before handing over the keys. Individuals with strong credit and a history of making payments on time are much more likely to pay consistently.
- Letting a Handshake Seal the Deal: Just as checking credit is good business sense, so too is requiring a contract in a rental agreement. A rental property is too big of a financial asset to be signed over in a handshake. With a contract, you establish ground rules and ensure expectations are clear between you and your tenant. Should problems arise — from damages to the property to lapses in payment — your contract is what protects you.
- Underestimating Financial Costs: When you’re the landlord, you’re responsible for maintaining the property. If the water heater goes out or the roof gets damaged in a storm, you’ll have to handle it. Make sure you anticipate these costs before getting into the landlord process, and you save yourself unexpected losses later down the line.
- Underestimating Time Costs: Being a landlord takes more than money; it takes time. Be sure you anticipate having to check on tenant problems or needing to respond to emails, so you’re not blindsided later. Alternatively, if you’re willing to spend the money to save time, find someone to manage properties on your behalf.
Have you been a landlord? What mistakes do you wish you’d avoided from the get-go? Or are you only considering renting out property now? In either case, keep these tips in mind to make your experience a more positive one.