Self-managing landlords often think they’re saving money by taking care of their own rental property. They think because they’re not paying a management fee, they are increasing their ROI. However, there are many mistakes that landlords can easily make, and those mistakes can be expensive. In fact, they often cost more than a management fee.
Let’s take a look at some of the most common landlord mistakes we see. These are not only expensive; they’re usually avoidable.
Understanding the Local Rental Market
When pricing your home, you must understand the local rental market. If you don’t, you’re probably going to price your home too high or too low. Either way, you’ll lose money. If you price it too low, you’re not collecting what you should. If you price it too high, the home will remain vacant and unoccupied, costing you weeks or even months of rental income.
Knowing the Fair Housing Laws
Landlords who don’t know the fair housing laws are in danger of making huge mistakes when they’re advertising, screening, and even collecting rent and enforcing the lease. You need to know the fair housing laws on a federal, state, and even local level. Otherwise, you could be accused of fair housing violations, and you probably won’t even realize you’ve done something wrong. This is where professional property management can help. Your property manager knows the law and can keep you in compliance.
Thorough Tenant Screening
Screening tenants thoroughly is incredibly important. If you don’t screen well and you place a bad tenant; you’ll spend a lot of time and money chasing down late rent and trying to avoid property damage and eviction. It’s also important to be fair when you’re screening applications. Some landlords will follow instincts when tenants apply, or will make decisions based on race, religion, or whether the tenants have children. These things are illegal and will get you in a lot of fair housing trouble.
Develop some written rental criteria, and screen all your applicants according to that criteria. Provide a list of the standards tenants are required to meet before they’re approved for your property.
Lease Agreements that Aren’t Specific or Strong
A strong lease agreement that’s specific to California is critical. Otherwise, you won’t have a lot of legal back-up when you’re trying to evict or collect overdue rent. Property managers create, negotiate, and execute leases every day. We can help you find a legally enforceable California lease agreement.
Disrupting Current Tenants While Showing the Property
Even if your current tenant has provided a notice to vacate, you still need to give them privacy. You cannot show up unannounced at the property whenever you want to show it to new potential tenants. Provide at least 24 hours of notice.
Interfering with Property Managers
Let your property managers do their jobs. If they call to let you know that there’s repairs that need to be done and it costs $100, don’t fight it. Trust them to know what’s best for your property. You must let them do their job. Otherwise, things don’t get done, and your tenant will become upset.
These are some of the common mistakes made by landlords. If you have any further questions please feel free to contact us at REC Rentals. We’d love to tell you more.