Tips for First Time Landlords: Common Mistakes to Avoid
There are many ways to become a landlord. Renting out your spare bedroom, renting out the empty unit in a duplex or an entire house you don’t use. Maybe you’ve purchased a second home for this purpose. Becoming a landlord has its many benefits but it also has its difficulties. We’ll go over some common mistakes first time landlords can easily avoid.
Tip Number 1: Be aware of your responsibilities as a landlord.
Becoming a landlord might sound easy at first. Rent your extra living space and collect money. In reality, it’s not that easy. Landlords have many responsibilities to keep in mind when offering their living space to a tenant. You need to make sure you hold up your end of the lease, keep the rental in living habitable conditions, constantly check in on your property and your tenants, and take care of maintenance requests quickly and efficiently.
Tip Number 2: Learn how to manage your time.
If you fail to learn how to manage your time, you will quickly find yourself in trouble because you won’t be able to take care of your rental property. This situation gets worse when you start investing in more and more rental property scattered over town. Managing your rental property can quickly become a full time job. Learning how to manage your time will ensure your main job, side rental property business and family/leisure time will be taken care of.
Tip Number 3: Constantly review your rights as a landlord.
Laws change. They change on a yearly and monthly basis. They change on a federal, state and local level. As a landlord, it is your responsibility to stay on top of the constant changes in landlord/tenant law in California. This also means you need to know your rights too. You can easily keep up to date by joining apartment associations and/or hiring a property management consultant. Staying up to date on landlord/tenants law can save you a lot of time and money by avoiding costly lawsuits.
Tip Number 4: Stay organized.
There are documents you will need to be consulting constantly. It is very important you keep yourself nice and organized so that you can easily find these documents. Modern tools make this easily possible. You can digitally scan your rental agreements and store them on your computer. You can have important notices saved as templates on your computer so you can easily print out notices that you issue your tenants.
Tip Number 5: Never skip screening your tenants.
Screen every tenant you rent to. You want to make sure you get the whole picture of the person you are trusting your valuable asset to. A tenant has responsibilities when they sign the rental agreement, such as taking care of your rental.
Landlords who have made this mistake will tell you that it doesn’t matter if you’re renting to your cousin or an in-law, go through the screening process. It’s vital for your business that you verify your tenant has a job, steady income, good credit history and now previous evictions on their record.
Tip Number 6: Do market research.
Before you put up your for-rent ad, make sure you know your market. What are other rentals with the same comparable amenities and value in the same area going for? Do they offer all of the appliances you are offering? How many parking spots do they offer vs you? Do they allow pets? Are they forcing a lengthy lease or is it month to month? What about furniture, are they furnished units?
These are all good points of comparison to put a price on your rental.
Tip Number 7: Know when it’s time to hire help.
Signs you may need to hire help such as a property manager:
- You are constantly renting to bad tenants.
- Your time is spread too thin and you are not able to properly keep up with your rental.
- Your rental is vacant more months out of the year than occupied.
- You don’t want to deal with your tenants anymore.
- You want to focus on your job and/or family.
Knowing when it’s time to hire a property manager before it’s too late is so important. You don’t want to wait until it’s too late and get into big legal problems.
Becoming a landlord can be the best decision of your life! There are many benefits and highs but there are also many lows. You don’t have to commit the same mistakes experienced landlords have made. We hope these tips can help save you from costly mistakes and guide you to becoming a successful landlord.
Filed under: Landlord Tips