Avoid These Pitfalls as a Landlord
Everyone makes mistakes. Whether you’re a car salesman, a teacher, a surgeon, a retiree, or any other occupation, you will make mistakes. Landlords are certainly not exempt from this rule, especially considering how complex real estate law can often be.! But since some mistakes are more common than others, we put together a list of the eight most common pitfalls of property management. While you cannot prevent all mistakes and problems, if you keep these in mind, you will be less likely to find yourself in litigation.
Failing to create a system. Based on your knowledge and experience in property management, you should develop an established system for dealing with every phase of renting a property… and don’t deviate from it.
Not screening tenants. It’s better to allow a property to sit vacant a bit longer, than to skimp on tenant screening out of desperation. Failing to thoroughly screen tenants often leads to some of the worst problems in property management.
Creating insecure leases. Your lease agreements should be airtight as well as lawful. Without a solid lease contract, your investment is unprotected.
Undercharging rent. Most of your operating income is derived from rents… So know how much your property is worth! Use the appropriate tools, like rental market surveys, to gauge your market, so that don’t risk undercharging.
Failing to enforce rules. A rule that is not enforced is not a rule at all. Since the purpose of any rules you’ve created is to protect your investment, you can’t afford to play the “nice guy” (although you can certainly enforce rules “nicely” and ethically). When you’re tempted to overlook violations, ask yourself this question: “Am I running my properties, or are my properties running me?”
Not understanding or following Fair Housing laws. These are federal and state laws that apply to everyone, and violations can be costly. Know the laws before you lease.
Improper and costly maintenance. It costs much less to properly maintain your properties, than it does to repair major problems. Routine maintenance checks are essential to keeping maintenance costs down.
Forgetting to educate yourself and stay up to date on real estate laws. Real estate law is not only complicated; the rules often change just when we believe we know everything. When you fail to stay on top of changes in laws and procedures, you cost yourself money.
For example, imagine that you’re trying to evict a non-paying tenant, but you keep making small errors in legal procedure…. Each of these errors can result in days or weeks of delays! And all that time, you’re losing money.
We can help with all of these items, especially that last one. Call our real estate attorneys to discuss your property management practices, and we can help to ensure that your leases are airtight, your procedures are legal and efficient, and you’re up to date on all laws and regulations that affect your business.