Top 5 Mistakes Landlords Make

Investing in rental property can be a lucrative business for savvy investors who generate strong income and capitalize on building equity. Many people operate a side business in rental property investment and can prosper handsomely house-for-rentfrom their risk and rewards.

Others make a full-time living from renting out properties and continue to seek expansion opportunities.

Most of the smaller rental property landlords either reside on the property or live nearby so they can keep tabs on their investments.

But, larger investors who own many properties are usually long-distance owners and need assistance in managing their rentals. Whether their portfolios hold single properties or multiples, many landlords still make mistakes that cost them money and put them in legal jeopardy.

Here are 5 of the top mistakes landlords make that could be alleviated by using a property management service.

1. Failing to Properly Qualify Tenants

Inexperienced or distant landlords often fail to take the time and properly qualify potential tenants before entering into a lease arrangement. Exercising due diligence in filling a rental unit is just as important as purchasing the property.

Proper tenant screening should be a structured procedure with qualifying questions and answers written down and signed off by the applicant and the tenancy representative. Questions should address previous rental history, employment, credit profile and independent references. Be aware of human rights issues when formulating questions. Any sense of discrimination on age, race, religion, gender or sexual orientation is prohibited.

By properly screening tenants, potential problems such as failure to pay or damage to the premises are minimized and may head off a lengthy and difficult resolution process like eviction and lawsuits to recover damages.

2. Lack of Documentation – Before, During and After Move-In

Documentation shouldn’t stop at the screening questionnaire. Credit reports and reference comments should be part of the file as should contact information for the tenant’s bank and employer. A tight, binding rental contract is vitally important. It must include terms of payment, deposit conditions, deposit resolution and specific house rules like pets and modification to the property.

3. Neglecting to Inspect and Plan for Maintenance

This can be a costly mistake for landlords. All rental properties will need regular maintenance and expenditures. Failure to maintain and repair issues in a timely manner is a ticket to expensive problems with the building and bad relationship with tenants. Inspections are more difficult for distant landlords than for resident owners. It’s wise to hire help in monitoring investment properties.

4. Viewing Rental Properties as a Hobby

Owning rental properties is an expensive business and must be treated as one. Most landlords are not capable of wearing all the hats that it takes to rent out their properties. These include being a handyman, groundskeeper, bookkeeper, tax accountant, rent collector, and insurance broker.

5. Not Hiring a Professional Property Manager

This is perhaps the biggest mistake landlords make. Whether thinking it’s too expensive to hire a property manager or simply not appreciating the value a professional property manager brings to the rental business, this is one area not to ignore. A professional property manager will easily earn back their fee in recognizing, mitigating and preventing potential problems.

Consider using The Realty Medics as your property management company. They are the best property managers in Central Florida and will look after your real estate investments.