Without proper landlord experience, it can be easy to lose money, time and sleep. Avoid these common landlord mistakes to make your life a little easier.

Thinking it’s a Hobby

It’s important to remember that your rental property is a business—it needs to be treated as such. In order to make a profit, be sure to have a bookkeeping system, separate bank account for expenses, and the help of a professional tax consultant.

Relying on Advice

All of us have heard at least one horrible rental story. For that reason, avoid going to friends or family for advice on your rental property. Instead, subscribe to a real estate magazine or consider hiring a property manager to keep everything running smoothly.

Assuming Occupancy

Don’t make the mistake of believing your property will always be rented. Be sure to do a simple cash flow analysis to ensure you have sufficient funds to cover the months when renters are few and far between. If you’re unable to cover the mortgage you risk potential foreclosure and financial ruin.

Proper Credit Checks

You’re anxious to get a tenant and see rent coming in, but it’s crucial that you take the time to complete tenant screening reports. Use thorough applications to obtain the information you need, verify references, and charge a fee to cover the credit check. Feeling rushed or pressured might lead to a costly mistake.

Asking Illegal Questions

Familiarize yourself with laws and legal codes to avoid asking illegal questions during a screening interview. To avoid being sued for discrimination, never deny a tenant’s application on the basis of race, color, religion, national origin, sex, handicap, or marital/family status.

Withholding Disclosures

If you have a prospective tenant, making disclosures might seem risky. However, disclosures are mandated by law and must be presented before any lease is signed. Every state has different requirements, but common disclosures include the presence of mold, notice of sex offenders in the area, and identification of recent deaths in the property.

Making Handshakes

Handshakes are common in business, but you should never solely rely on promises. For your legal protection, you need a signed, binding document to provide to a judge in the event that you run into trouble with your tenant.

Not Writing it Down

As a landlord, it’s imperative to document everything. Record all interactions with your tenants, including phone conversations, voicemails, texts, and emails to support any allegations you might make or face in the future.

Underestimating Upkeep

When you rent out a property, you become the go-to person whenever an issue arises with structures or appliances. Plan on having money aside to pull out of the business or your own pocket to cover repairs. It’s important your building is properly maintained with painting, carpets, and cleaning to keep tenants interested.

Failing House Codes

Stay up to date on your local and state housing codes to avoid fees, penalties, or even a lawsuit for personal injury. Maintain your end of the legal bargain by ensuring your property upholds health and safety standards.

Neglecting Tenants

The home or apartment you are renting out is your responsibility, and if you don’t check in with your tenants or the condition of the property, you will have no one to blame but yourself. When inspecting the space, abide by your state’s laws regarding tenant privacy and do not drop by unannounced.

Enforcing Terms

Letting a thing or two slide here and there can be a slippery slope. Tenants may realize you are lax about the lease terms and fall in suit. If your lease says no dogs, enforce the penalty. Set and stick to the standards you want upheld.

Delaying the Eviction Process

If a tenant is behind in rental payments, always enforce the late fee stated in your lease. Never accept partial payments. When tenants are consistently late and have grounds for eviction, begin the process immediately to avoid a housing crisis. The process can be costly and time-consuming, so always be proactive.

Any time you first get started with something, mistakes are bound to be made. No matter what, always remember to learn from your mistakes and keep going.

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