We aren’t born to be landlords. There is no inherent knowledge provided to us by the heavens of the proper way to manage rental properties and tenants. It’s something we learn, often on the fly, after we have acquired the property and usually after we have installed tenants.
Learning from mistakes is the costliest way to become a landlord. This blog post will help you avoid some of the most damaging mistakes that landlords often make, and help you protect your investment and profit-margin.
Screen Potential Tenants
Tenants can cost you a ton of money. If you allow a renter who fails to maintain your property, it can cost you more than just the expense to repair and clean after they have moved on. Inconsiderate tenants can also chase off your more desirable tenants with noise complaints, foul odors, etc., and no loss is more damaging to a landlord than having properties go unrented.
No one can guarantee that you will not make mistakes when selecting applicants, but a thorough background screening of potential tenants can help you find red flags early enough to choose another candidate.
You are a Landlord, Not a Friend
Every good landlord-tenant relationship requires a certain amount of trust and respect. It can be all too easy to become comfortable with a new renter and venture too far into the friend-zone.
On the other hand, a couple of disappointing experience can easily harden you to the point that you become undesirable as a landlord. It is a delicate relationship to maintain. It begins with a professional application process, well-drafted paperwork, and establishing expectations up front.
Maintain, Don't Repair
This one has very little to do with your tenants. Far too often, property owners will neglect relatively inexpensive maintenance or put off minor repairs, a decision that can wind up far more costly if major repair becomes necessary.
Be sure to perform inspections before and after a tenant moves in, respond quickly to tenant complaints or observations, and consider other minor maintenance tasks that could help protect your bottom line.
Know Your Rights and Responsibilities
Each state and municipality has its own unique housing laws and regulations in place. There are tons of clauses and documents to familiarize yourself with, and it is vital to do so.
Do not rely on what you believe to be the law. Instead, make sure that you are knowledgeable about your rights and responsibilities as well as those of your renters. Failure to do so can expose you to costly and damaging legal proceedings that could have been easily avoided.
It’s a daunting task, managing a rental property. However, if done right, it can be quite rewarding…financially and otherwise. We recommend that any landlord consider hiring a property management company to make sure they are making the most of their investment and avoiding expensive mistakes like those listed above.
Need help hiring a property management company? Download our free guide to finding the best Michigan property management company!