How To Avoid Common Landlord Mistakes
Being a landlord brings on a whole new set of responsibilities and by not handling situations the right way could end you up in quite a bit of trouble. Without experience or the knowledge to manage a rental home you could quickly lose money and time. Avoid running into these common mistakes listed below.
Failing to Perform Adequate Background Checks:
As exciting as it may be to get leads for your property don’t just jump on the first person you get without running a thorough background check. Put a rental application process in place for potential tenants and pay to have a screening reports ran on all potential tenants. These reports will highlight any red flags and could potentially save you from a bad tenant occupying your property. Check out our screening process here.
Relying on Someone’s Word:
Unfortunately, gone are the days when you can trust a handshake and someone’s word. Don’t make the mistake of not putting everything in writing and preparing a lease. Without a lease, you open yourself to many potential lawsuits and problems. Online leases do not offer great protection for the landlord. Paying an attorney or hiring a property manager to find you tenants and draw up a lease will offer you far more protection. In addition, if you do not have the tenants sign a lease for a minimum of 6 months and 1 day you will be liable for short term rental taxes which are currently running at 12%.
Failing to Perform Inspections:
Without inspections, you will have no idea how your property is being taken care of. We’ve all heard horror stories where tenants trash the home leaving owners with repairs on top of repairs. Avoid this mistake by setting expectations for tenants about periodic inspections. And yes, with the correct advance notification you do have the right to enter your property while it’s being occupied by tenants. Here at Gulf Coast, we include a move in inspection, 90-day inspection and a renewal and/or move out inspection to review our owner’s property/s and ensure everything being taken care of. You may think your tenants are great. Why? They always pay on time and they never call with work orders. Trust, but verify is the way to go.
Cost of repairs:
Don’t underestimate the cost of repairs that come along with owning a rental home. To keep tenants, you must maintain your rental. So that means normal wear and tear items in your house will need fixing or replacing between tenants to keep in tip top shape. A good way to manage repair cost is to set aside a percentage of rental income in a reserves account. This will help you budget the expenses that come along with owning a rental property. Tenants always refer to poor attention to maintenance as their #1 reason for not renewing a lease.
Ignoring Federal, State and Local Housing Hodes:
Being a Landlord comes with a tremendous amount of responsibility. As the Landlord, you will have to ensure the property conforms with federal, state and local laws in terms of property safety and health standards. If a landlord fails to meet these standards they are opening themselves up to heavy fines and almost certain litigation. At Gulf Coast Property Management, we ensure we keep up to date with these regulations. All of our operational staff attend education events and conferences amassing at least 40 hours of education each year.
Owning a rental property can be rewarding but it also poses challenges. A lot goes into a well-managed property. If you have any questions about these common mistakes or simply want to speak to someone about property management services, please feel free to give us a call. We would be happy to help!
Hungry for more? Check out the two blogs below or visit our Owner Resource Center here to find answers to all of your questions. Or give us a call at (941) 782-1559, we’d be happy to answer any questions you may have.