Property Management: 7 Biggest Mistakes That Landlords Make.
Managing rental properties can be an excellent way to generate income, either primary or secondary, however if it is not done properly it can end up costing far more than it’s worth, both in terms of time and money. ALH|Podland Rental Homes Property Management knows that the most common mistakes that landlords make are also the ones that cause the most problems. Knowing what they are and taking steps to avoid them can save money, time and headaches.
- Not running credit/background checks on potential tenants. No landlord wants property sitting empty, but failing to run credit and background checks in order to get someone into the property quickly can be a very costly mistake. Taking the time to check references (employer, personal and previous landlords) as well as spending the money for a credit check can give you a good idea of how well your prospective tenant pays his bills…and whether or not he’s going to pay you.
- Counting on the property always being rented. Before purchasing rental home as a real estate investment, you need to make sure that you can cover the mortgage, utilities and maintenance if the property sits empty for any length of time. Failing to do so can place you in a financial bind and could lead to loss of the property and costly legal fees.
- Underestimating the cost of repairs and insurance. Ideally, you’ve done your homework and are aware of what it would cost to replace the water heater or fix the roof. Failing to do so can cause financial headaches and end up costing you money that you don’t have.
- Not enforcing the lease terms. Your tenants signed a lease, with well-defined expectations. Failing to enforce these terms immediately upon violation can lead to headaches, damage to property and legal action on their part. If the lease states that there is a penalty for late payments, and you don’t apply the penalty on the first late payment, then apply it six months later, it could be very difficult to enforce.
- Not meeting housing codes, both state and local. Landlords who don’t meet housing codes become “slum lords”. Trying to rent properties that don’t meet codes is not only illegal, but results in lower rent, lower revenue and ultimately can cost money in legal fees and fines.
- Maintaining Good Tenant Relations. You have entered into a business agreement with your tenants, and there are obligations to be met on both sides. You need to make sure that you keep your end of the contract, including repairs spelled out in the lease, payments that are included in the rent (for example, paying the electric bill if it is part of the monthly rent) and keeping the property in good condition and up to code.
- Relying on a handshake. Regardless of who you are renting the property to, you need to draw up a lease that is signed by both of you. Business between friends and family can end badly if both parties do not take steps to protect their interests.
ALH|Podland Rental Homes Property Management can ensure that your real estate investment is handled properly to avoid many of the missteps made by landlords. If you are seeking property management services in Atlanta, call us today at 404-937-2827, ext. 2, or visit our website at www.alhpodland.com. Also, check out our OwnerBuzz Blog.