As with all areas of life, some mistakes are small and have minimal consequences. These small mistakes can comfortably be chalked up to learning experiences. Other mistakes can land you into legal and financial battles. Going it alone can be intimidating and can have lasting consequences. Hiring a property manager will provide you with the knowledge and support needed to run a smooth renting process for you and your residents and help you avoid these 6 landlord mistakes.
1. Performing Inadequate Background Checks
Don’t make the biggest rookie mistake of all: improper screening of tenants. It’s lucrative to fill your vacant home as quickly as possible and get the rent checks rolling in; but it’s not worth it if you choose tenants with a history of failing to pay the rent. An inconsistent screening process can also get you into legal trouble, especially if there’s a possibility of discrimination. Inconsistent screening can land you with a fine, and increase your chances of leasing a unit to an irresponsible renter.
EXPERT Property Management screens for multiple areas of interest such as credit, criminal, collections, rental history, employment verifications, and more.
2. Failing to Follow Fair Housing Laws
Fair Housing Laws are single-handedly the most important knowledge base a Landlord needs to know and require time and effort to learn. Landlords cannot discriminate based on race, color, religion, sex, national origin, handicap, or familial status.
Anyone who violates these laws or other areas of fair housing safe practices, will be smacked with a hefty fine.
EXPERT Property Management agents and managers are required to complete Fair Housing training and be certified to comply with these rules and regulations.
3. Using Outdated or Generic Leases
Your renters have to sign a lease agreement before they move in. However, it shouldn’t be just any “standard” lease agreement that you can download from the Internet. Your lease agreement should be extremely specific, and detail your precise stipulations for living in the space as well as expectations about the future. In addition, the lease should adhere to all current tenant – landlord laws. This lease agreement needs attorney approval to avoid loopholes and legal trouble. Failure to present a proper lease can lead to fines, lease breakage, or lawsuits.
All EXPERT Property Management leases are attorney prepared by the Law Offices of Heist, Weisse & Wolk, P.A. and compliant to the most up to date tenant – landlord laws.
4. Ignoring Dangerous Conditions and Neglecting the Property
If you expect tenants to hold up their half of the lease agreement, you must also hold up yours. It’s not a suggestion; it’s the law. If you know about a dangerous condition on the property and fail to act to repair it, you’re going directly against your half of the legal agreement and can be subject to lost revenue, lawsuits, fines, and loss of licensing, depending on the severity of the issue.
At EXPERT Property Management we have seen and experienced it all. Our agents are knowledgeable to handle any maintenance issue that ails you. Our wealth of vendor base will ensure you repair any dangerous condition for the best price.
5. Improperly Attempting to Evict Tenants
Landlords have a right to evict tenants who don’t meet the contractual agreement, but it must be done properly according to state law. After distinguishing if the resident should be evicted, it should not be delayed. If your resident is breaking the contract it is important to penalize appropriately and quickly to avoid setting a standard of improper grace that repeats itself and becomes a big headache.
Be sure to follow correct procedure when you evict the tenants. When to set out a notice, how to write/enforce the notice, late fee charges, how to post a notice, etc. Improperly handling any of these steps will invalidate the notice.
EXPERT Property Management has developed a process to serve proper notices in timely manor, using the proper methods, to ensure all notices are valid resulting in a quick and efficient eviction process.
6. Underestimating Costs
Landlords and property owners often find themselves in hot water when they underestimate the costs associated with running the property. Most landlords budget for insurances, taxes, and mortgages, but they might neglect to include landscaping, maintenance repairs, and lost revenue from vacancy. Savvy landlords will develop a more realistic estimate of these costs and create a healthy amount of savings in case of vacancy. Annual maintenance and living costs can run anywhere from 15 to 20 percent of yearly rental income, so you should have that amount stowed away for unforeseen annual costs.
At EXPERT Property Management, we want to ensure your investment return and or/coverage will sustain your financial goals for your home, with the most realistic expectations possible.