It seems like everyone is getting into real estate these days. If you’re not already a landlord, you probably have (several) friends and family members who are, and the benefits can be attractive. Extra income each month. A property that appreciates in value. Making money while you sleep. It’s true; there are many benefits to owning real estate. Plus, when managed properly, rentals can be a valuable source of income. But there are also landlord mistakes to avoid, whether you’re new to the market or already have properties that you own and manage.
6 of the top landlord mistakes to avoid:
Not Knowing Your Neighborhood.
In real estate, location is everything. People want to live in desirable parts of town, and a property in a great area will fetch top dollar. In addition to being in a desirable neighborhood, it’s also a great idea to know what kind of neighborhood it’s in. Is it on the quieter, suburban side, or is it right in the middle of the action, within walking distance of shops and entertainment? The type of neighborhood will play a role in the applicants you receive and the rates you can charge. This is where a locally based property management firm like Greyhaven can help. Speaking of property management…
Not Partnering with A Property Management Firm.
Calling property management complex is an understatement. There are daily responsibilities, tenants to screen and approve, major repairs to perform and local, state and federal regulations to comply with. And that’s for each property! So, multiply those responsibilities by the number of properties you own. This is where a reputable property management firm like Greyhaven can be a godsend. Greyhaven can take all those tasks, and stress, off your shoulders. Our professionals have vast experience finding tenants and maintaining property in the Chattanooga area.
DIY Repairs to Save $$$.
Unless you’re professionally skilled at performing the repair or maintenance in question, you should hire a professional. This is important for a few reasons:
- Small repairs can quickly turn into major projects, and you could find yourself in over your head.
- Time is money. All those trips to the hardware store are using up your valuable time. Could it be better spent on something else?
- Slipshod repairs can be hazardous and waste money in the long run.
- Tenants talk. If you get a bad reputation for not taking care of your tenants, that could hurt future leasing opportunities.
Not Managing Your Property as a Business.
This is an especially common trap for property owners with just one property. Whether you have one, or 10, or 25 rentals, you need to treat real estate as a business. At a high level, this means keeping separate accounts for business and personal finances. (Some owners keep separate accounts for each property.) You should also maintain proper financial paperwork, insure the property to protect yourself and your tenants, and maintain a cordial and professional relationship with your tenants. Although being a landlord may be your side hustle, it’s still a business. Plus, this is your tenant’s house, so you should work hard to make it a safe, well-maintained place to call home.
Not Thoroughly Screening Tenants.
The tenant application and selection process is the most fraught few weeks in real estate ownership. Select the right tenants, and you’re on your way to a successful year or two. Select the wrong tenants, and you could be in for a drawn out nightmare. Don’t take any shortcuts when it comes to screening tenants. Also make sure you’re following fair housing laws. At a minimum, the process should include an application with references, financial and criminal background checks and employment and salary verification.
Prospective tenants can be choosy. After all, they’re selecting a place to call home for a year or more. They’re going to care about safety, affordability, comfort and more. Put your best foot forward, right from the start. Do a little curbside enhancement. Hire a professional photographer and videographer to create a great online listing that highlights all your property’s positive attributes. You really can’t do too much when it comes to making your property shine! A professional listing also communicates to potential renters that you’ll be a professional landlord.
As you can see, being a successful property owner can be a lot of work. If you’re already managing your own properties, this doesn’t come as a surprise. Perhaps you’d like a little help, and a little less stress in your life. If that sounds good to you, don’t hesitate to give us a call at 432-648-6676 or contact us online. We’d love to help you avoid these common landlord mistakes.