Owning rental properties is a great way to boost your income, sometimes considerably. Yet, property ownership and property management come with the potential for plenty of mistakes before making the income you want from your rentals.
Mistakes happen, but knowing how to avoid some of the most common mistakes can keep you on the path to success. With that said, here are five of the most common mistakes all landlords should avoid with insights from our expert Sarasota Property Management team!
1. Setting the Wrong Monthly Rent Amount
Setting the right rental rate is crucial, but it's more than weighing the size of the unit or "picking" a monthly rent amount that seems good. How many bedrooms a unit has and the size of the living area does matter, but there are other things to consider, too.
The monthly rent price is how investors generate rental income every month! Trying to set the right amount yourself without research might result in setting rates too high or too low. Setting the rent too high might lead potential renters away. Consequently, setting your rental rates too low can also lead to lost income every month.
Investors need to evaluate comparable properties, a rental's location, and other factors to determine the ideal rental rate for every property. If you're not sure how to analyze the market and your property, a Sarasota property management company can deliver the research and insights you need.
2. Not Performing Background Checks
Your rental rate is set. Your Sarasota units are ready, and you've got a few applicants. Now what? Background checks might seem like a painful (or time-consuming) process now, but they can save you a bundle later.
Imagine the difference a background check might make between securing a tenant who consistently pays rent on time versus one with a history of missed payments. Worse yet, your new tenant causes property damage and refuses the rules, despite breaking the rules and skipping rental payments.
To avoid bad renters, always pre-screen and interview each prospective tenant. Your process should credit history, a criminal background check, prior rental history, income verification, and communication with references. If you're not sure how to get this process going, work with a Gulf Coast property management company to handle it for you!
3. Doing Your Own (Unqualified) Maintenance
For simple repairs, DIY fixes can sometimes be the right solution. However, for more complex repairs, it's better to call a professional, especially if you hope to recoup some or all the costs. That’s particularly true of repairs due to tenant damage.
Sarasota property management companies can be the best solution to handle all rental property repairs and routine maintenance. Rather than attempting repairs on your own or dealing with multiple contractors, a property manager coordinates all maintenance services and relies on a vetted network of contractors to do quality work!
Many contractors also carry professional liability insurance to cover injury or damage to your property. Alternatively, if you DIY it and make a mistake that damages your property, you’ll end up with more repairs, costing you even more money, time, and resources. Fixing things on your own or making unqualified repairs can be an expensive mistake—and lead to injuries for you or your tenants).
4. Planning Based On Unrealistic Financial Expectations
Rental income isn't "pure" profit. If you expected to buy a Gulf Coast rental property, then sit back and collect rent checks to go directly into your pocket, it's time to manage your financial expectations!
Regular maintenance and repairs are just two ongoing costs you can expect as a property owner. Other expenses include taxes, fees, tenant risks, insurance, marketing your property, and more.
When setting your rental price, make sure you understand how much rental income you need to cover all property costs before you experience any profits. Learn more about rental property ROI to set realistic financial expectations. Then, be patient! Rental properties are a long-term investment. With the right strategies and expectations, investors can meet their financial goals.
5. Not Hiring a Property Management Company
One key to becoming a successful property owner is knowing your limitations and bringing in experts when you need them. If you're up for handling every task on your own, that's great! However, if it sounds a tad overwhelming, then consider hiring a Gulf Coast property management company to help you.
The right property manager helps investors avoid these mistakes (and more)! Plus, you don't have to do any of the work to enjoy your passive real estate investment income.
The Right Sarasota Property Management Company Skips Costly Mistakes
Owning and managing a rental property need not be hard, but there are some common pitfalls to avoid. Doing all the work yourself might offer a great way to cinch your budget upfront, but it can also present costly problems for you later. Hiring a Sarasota property management company helps eliminate issues while also freeing up your time for more important matters.
Choosing Gulf Coast Property Management means you have the best experts working for you and your properties! If you're ready to skip these mistakes (and more), reach out, and let's talk about how we can help.
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