Do you dream of buying an investment property, finding good tenants, making passive income every month, and potentially selling your asset down the road for a great return on investment?
That’s the dream of many people who invest in rental properties. But this dream can quickly become a stress-inducing, time-wasting, and money-draining nightmare.
If you’re a first-time rental property owner, there are errors you’ll want to avoid. Even seasoned property owners can fall into these traps. But as a newbie, you should learn from the mistakes others have made in the past. You don’t have to repeat them.
Keep reading for five errors you must avoid at all costs as a first-time rental property owner.
One of the biggest mistakes you can make as a rental property owner is to accept tenants without first conducting a thorough screening process. One reason people buy investment properties is to get monthly rental income. But if you accept a tenant who either doesn’t pay rent on time or doesn’t pay rent at all, your stream of passive income will dry up. And few things are as aggravating and stressful as tenants who prove to be unreliable.
So, you can’t just hand over the keys to someone without screening. A property manager like Green Residential can help you find the best tenants for your rental units. We have a rigorous screening process designed to find you quality tenants. We’ll do the following:
Our multi-step screening process will help you avoid high-risk applicants and focus on high-quality applicants that are a good fit.
In addition to potentially missing out on rent if you accept the wrong tenants, you could also be on the hook for the following:
While you can’t eliminate risks, you can mitigate them and boost your chances of success. Hiring a professional property management company with experience in screening applicants makes sense.
You also need to ensure you have proper lease agreements in place. And you don’t want to be so buddy-buddy with an applicant that you don’t have a formal lease agreement at all. That would be a horrific error that could cost you at some point.
A legally enforceable lease agreement needs to lay out terms, policies, and conditions between the tenant and the landlord. Failing to do so could lead to problems down the road.
Lease agreements are serious business. That’s one reason retaining the services of a property manager like Green Residential makes sense. You’ll have help to put together a lease agreement that’s clear and legally enforceable. Doing so will benefit you and your prospective tenants.
Not every rental property owner wants to be a property manager. But one thing you can’t skimp on is customer service. What’s the point, after all, of finding the right tenants if you’re going to treat them poorly and see them head for the exits at the end of their leases? You need to be responsive to tenant concerns and remember that proper communication is a two-way street.
Your tenants are your source of passive income. So, you need to prioritize them and ensure they can reach you and know that you’ll respond when they need your assistance. If you don’t prioritize customer service, you’ll end up with a bunch of vacant units. And the only people who will put up with shoddy customer service are the types who might not be the best of tenants.
If you don’t want to wear the hats of “owner” and “manager,” all you have to do is hire a property manager like Green Residential. We’ll handle tenant-owner relations on your behalf. So, you won’t have to be on call 24/7. That means a higher quality of life for you and your tenants.
When you buy a rental property, one of the things you must prioritize is preventative maintenance. That means servicing, inspecting, or tuning up the HVAC unit, the eavestrough system, the plumbing system, and other things. Overlooking these tasks could lead to more extensive problems down the road that result in more expensive repairs.
Whether you’re a new or experienced rental property owner, you can benefit by hiring property managers. A property manager will set up maintenance and repairs, which means the following:
You should never turn a blind eye when you see tenants breaking the rules — such as paying rent after the deadline or smoking in a non-smoking unit. Whenever there’s a violation, you need to bring it to the attention of the tenant right away.
Many new landlords avoid confrontation. And while it’s best to avoid confrontation when possible, it can’t be avoided at all costs. Bad behavior must be addressed right away — that’s one reason why a rental agreement is so important.
Are you looking for an experienced property management company you can count on for your rental property? Whether you’re a first-time investment property owner or have owned one or more properties for a long time, we have a wide range of services to help you. Don’t make any of the mistakes highlighted above — and we can help you avoid other common mistakes people make.
For help with your property management needs, get in touch. We’re here for you. What you’ll find is that the property ownership experience is more pleasant when you have some help.
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