Managing rental properties can be both exciting and rewarding, but there are times when it is quite challenging as well. Making mistakes is just part of the business, and some mistakes can have a serious impact on your bottom line and relationship with colleagues and tenants. Give yourself an advantage by learning about the most common mistakes landlords make and how you can avoid them.
1. Skipping Tenant Screening
Tenant screening is undoubtedly the most important part of property management. Without reliable, responsible, and conscientious tenants, no landlord will survive for long. However, we often hear landlords lament skipping the tenant screening process because the person they rented to “seemed” like a good person or was someone they knew personally. These tenants then cause a whole host of problems for the landlord, including non-payment of rent, property damage, and conflicts with other tenants. NEVER skip tenant screening, and make sure you have a thorough process in place that verifies as much information about the person as possible, including their background, credit, employment, rental history, and more.
2. Neglecting a Written Lease Agreement
Verbal agreements always seem fine at the moment, but down the road small misunderstandings about the landlord-tenant relationship can lead to big problems. These problems are easily avoidable by simply writing out the lease or rental agreement. Clearly detail all aspects of the rental, including rent amounts, due dates, inspection processes, maintenance responsibilities, and more.
3. Setting the Rent Too High or Too Low
Pricing your rental property appropriately is key to attracting the right tenants and ensuring a steady income. Setting the rent too high may drive away potential tenants, while setting it too low could mean you’re not covering your expenses. Conduct market research to determine a competitive and fair rental price based on the location, property type, and amenities.
4. Failing to Maintain the Property
No one wants to live somewhere that is run down, especially when they’re paying rent every month. Property maintenance should be a top priority for any landlord. Conducting regular inspections, making sure the tenant knows exactly what to do in case of an emergency, and encouraging the tenant to always report issues immediately are essential for proper property maintenance. Landlords should be prepared to handle maintenance issues at any time, including evenings, overnight, and weekends. Having a trusted network of service vendors is helpful when dealing with urgent issues.
5. Not Enforcing Lease Terms
Consistency is key when managing rental properties. If you fail to enforce lease terms, such as late fees for overdue rent or rules about property use, tenants tend to take advantage of the situation. Make sure to apply the lease terms fairly and consistently to all tenants, and communicate clearly when there are any infractions.
6. Overlooking the Importance of Insurance
Property insurance is a must-have for landlords, but it’s also important to encourage or require tenants to carry renters’ insurance. While your insurance covers the structure, renters’ insurance covers the tenant’s belongings and provides liability protection. Make sure you’re adequately covered and that tenants are aware of their responsibilities regarding insurance.
7. Poor Communication with Tenants
Effective communication is essential for a good landlord-tenant relationship. Failing to communicate clearly and promptly can lead to misunderstandings, frustration, and conflicts. Set clear expectations for communication from the beginning and make yourself accessible to tenants for any questions or concerns they may have. Give them at least two different ways to contact you, such as a phone number and email address. Respond to tenant messages promptly.
8. Not Understanding Landlord-Tenant Laws
Landlord-tenant laws vary by state and are designed to protect both the landlord and the tenant. Not knowing these laws can result in legal disputes, fines, and other penalties for the landlord. Take the time to familiarize yourself with all federal, state, and local regulations, including fair housing laws, security deposit rules, and eviction procedures. This knowledge will help you avoid legal problems and manage your properties more effectively.
9. Inadequate Documentation
Keeping accurate and detailed records of all transactions, communications, and agreements is crucial in property management. Failing to document important details like rent payments, maintenance requests, and tenant communications can become a big headache if there are any disputes or financial discrepancies. Use property management software or a well-organized filing system to keep track of all records.
10. Trying to Do Everything Yourself
Managing rental properties can be time-consuming and stressful, especially if you have multiple properties spread out over far distances. Trying to handle everything on your own will inevitably lead to burnout and mistakes, which can be very costly in this business. In addition to using a trusted network of property service vendors, consider hiring a high-quality property management company to handle tasks such as tenant screening, rent collection, maintenance, and legal compliance. This allows you to focus on building your property portfolio while also ensuring your properties are well-managed and your tenants are satisfied.
Help for Landlords in Southwest Florida
Don’t fall victim to any of these common mistakes for new Florida landlords. Instead, learn from those who came before you and hire a great property management company, like Douglas Realty Property Management, to handle all of these aspects of managing rental properties. Our experienced team offers comprehensive property management services in southwest Florida, including tenant screening, maintenance, and legal compliance. Contact us today by calling 239-542-6906 to learn how we can take away the stress of being a landlord while still enjoying the perks!
