Being a landlord seems like the perfect opportunity to make some serious money. In fact, many people believe that owning rental property is as easy as placing tenants and collecting rent. From there, you earn a steady stream of passive income and have to do very little work.
Little do people know, becoming a landlord is much more challenging than that.
Until you become a landlord, you can never really understand how much knowledge, experience, and time it takes to become successful.
You also fail to understand how easy it is to make mistakes that can affect your bottom line.
But what new landlords can do is learn from the mistakes of others so you can grow your portfolio quicker than ever.
To help you, we’ve put together this guide of the most common mistakes new landlords make. This way, when it comes time for you to invest in your next rental property, you’re ahead of the game.
The 5 Most Common Mistakes New Landlords Make
1. Failing to Properly Screen Tenants
Every time you place a new tenant in your rental property, you must follow a strict screening process. If you don’t, you run the risk of placing a problem tenant in your property that doesn’t pay rent or damages your property.
New landlords want to start making money right away. But rushing the tenant screening process opens you up to many problems in the future.
Here’s a list of essential things you or your Grayson property management company should check before leasing to a new tenant:
- Making sure your tenant can pay the rent on time each month should be your number one priority. To do this, screen for bankruptcies, pending judgments, liens, and credit worthiness. You should also verify employment and income to make sure the numbers add up.
- Not running a background check on every prospective tenant is a major mistake. Always check for things like prior evictions, criminal history, and terrorist activity. If not, you might place a tenant in your investment property that does more than fail to pay rent each month.
- It’s tough to get to know a potential tenant when talking to them about your available property. That’s why asking others who do know the tenant what they’re like is a must. Ask for references so you can get to know your tenants a little better before agreeing to lease to them. This includes employers, friends, family, and prior landlords.
As a new landlord, it’s easy to skip past the important parts of tenant screening. But if you want high-quality tenants, you’ll learn early on that proper tenant screening should be a priority.
2. Not Following the Law
You may not realize it as a new landlord, but there are many federal, state, and local landlord-tenant laws that you have to follow.
And it won’t matter to the judge if you’re new to leasing rental properties and find yourself in a dispute. After all, ignorance is never a valid excuse.
As a new landlord, it can be overwhelming to think about all the laws, rules, and regulations you need to follow. That’s why having an experienced Grayson property management team on your side helps.
Here’s a quick rundown of some of the most important laws you should be familiar with:
- Eviction Proceedings. Evicting a tenant is never fun, but it comes with the territory of being a landlord. That said, not following the right eviction proceedings can land you in a lot of legal hot water.
- Improper Use of Security Deposits. There are very specific rules in Atlanta, GA about how you collect, secure, and use security deposits. And while having a security deposit is always recommended, it’s also important you know how to handle it. That is, unless you want to pay your tenant three times the amount you originally collected.
- Housing Discrimination. You cannot refuse to lease to a tenant based on race, color, religion, national origin, sex or gender, disability, or familial status.
Of course, these are just some of the biggest laws to be aware of. There are many others to be up-to-date on.
If you find yourself in need of Grayson property management because the idea of dealing with all the landlord-tenants laws is too much for you, find out how we can help. With years of experience, we’ll ensure that everything related to your property is legally compliant.
3. Not Preparing for Vacancies
Vacancies are one of the worst parts about being a rental property owner. After all, if your property sits vacant, you don’t receive a monthly rent check and you still have to continue to pay on the property. This can quickly eat into your savings or ruin your rental property business.
And to make matters worse, sometimes new income property owners don’t understand why their property continues to sit vacant.
Knowing that this is a part of the business helps you prepare for unexpected vacancies. It also lessens the financial blow.
For example, have a separate bank account for things like:
- Mortgage payments and other expenses
- Securing your property from damage while it’s unoccupied
- Maintenance, repairs, and cleaning in between tenants
- Landscaping services so your property is always ready for a showing
Expecting to receive a rent check every month forever after investing in a Grayson, GA rental property is naïve. Preparing for unplanned financial woes, however, is just being a smart business owner, even if you use property management in Grayson to help you with the day-to-day operations.
4. Not Understanding the Local Market
When you invest in your first rental property, it’s an exciting time. You look forward to finding a tenant and collecting rent each month that will help you achieve financial freedom.
But investing in rental property takes more than buying a great property to generate a lot of income.
If you don’t do your research when purchasing a rental property you risk buying a property in a non-desirable location, making it hard to lease or get the rent rates you want. Or you could find out the market as a whole is down, and what you expected to receive in rent each month isn’t reasonable.
Don’t start your career as a landlord in the red because you didn’t do your due diligence before investing. Instead, get a Free Rental Analysis from your local Grayson property management company.
Being patient and buying a property that’s valuable will help you get the rent rates you want. Plus, it will help you get high-quality tenants and long-term lease agreements.
5. Trying to Do It All
Managing a rental property is not easy, especially if you try to do it all on your own. Even experienced landlords often find themselves needing the help of Grayson property management to help generate income off their investment properties.
If you’re new to the rental property business and are looking for help, contact Atlantic Property Management today!
With our professional property management services, you can expect the following:
- A friendly team of experts to help answer your questions, aid your tenants, and command you a profit
- Help with lease prep including inspections and paperwork
- Strict rent collection procedures and immediate action if a tenant fails to pay
- Quick responses to all maintenance and repair requests
- Legal assistance, including help with evictions
- Complete transparency of all financial statements
Lastly, you can expect us to help you every step of the way. Whether you’re new to being a landlord and are looking to avoid mistakes, or are a seasoned expert who has a growing portfolio, we’ve got you covered. So, get in touch today and see how we can help you boost your ROI, ensure tenant satisfaction, and help you become a successful landlord.