Are you thinking of owning and managing a rental property on the Emerald Coast?
To avoid mistakes commonly made by rental property owners, it’s best to educate yourself about the business as much as possible.
Here are some tips to avoid common rental property owner mistakes.
1. Handling everything on your own.
Anyone can own property, but not everyone can manage it. Property ownership and property management are two different things. You only need money to own a property. Managing tenants, on the other hand, requires skills.
Do you know the basics of the Fair Housing Act?
Can you screen a tenant?
Are you aware of the landlord-tenant laws?
Can you handle tenants’ 2 a.m. calls?
If you are just starting out, consider hiring a professional. A good property manager can help you market your property, find desirable tenants, conduct property repairs and maintenance, and handle problematic tenants for you.
2. Hiring a company that only offers select services.
There are generally two main types of property management companies:
A) One that offers specific services
B) One that offers comprehensive services
Let’s suppose that you hire a company that only offers leasing services. Such companies won’t help you find quality tenants. Their job is finished as soon as they find a tenant to sign a lease with. From then on, the tenant will be yours to deal with.
Hiring a property management company that offers comprehensive services is the best option. Not only will they help you market your property, but they will also help you screen them as well.
3. Setting the wrong rent prices.
It goes without saying that the right rent attracts the right tenant. Undercharging tenants may mean leaving money on the table, while overcharging them may mean longer vacancies.
Coming up with the right rental price takes time, industry knowledge, and market research. Hiring a qualified property management company may be the best solution for you.
4. Taking a DIY approach to property repairs and maintenance.
A property owner that is just starting out may think that taking the do-it-yourself approach will save him/her money on property repairs and maintenance.
If you lack the necessary experience, this approach can be more costly than if you hired a professional. Small repair and maintenance issues can evolve into bigger and more serious problems in the future.
The repair and maintenance issues can even end up costing you good tenants and hurting your reputation.
5. Forming an unhealthy landlord-tenant relationship.
Having a good relationship with your tenants is key to success. However, for the relationship to be fruitful, it needs to be healthy.
Avoid being too friendly with your tenants as this may result in preferential treatment. They may begin to take lease terms less seriously, having a negative effect on your business.
6. Failing to set clear and specific tenant rules.
Clear and specific tenant rules are necessary for any rental business.
Your lease should include important rules on things like:
- The term of the lease
- Subletting or subleasing
- Pet rules
- Rent and security deposit rules
- Responsibilities for property maintenance
- Landlord entry rules
Ensuring that your lease covers all important details can help minimize potential issues with your tenants.
7. Failing to get proper insurance.
Insurance can help protect your property against potential disasters including floods, fires, and earthquakes.
Failing to get proper insurance can potentially cost you your entire property and investment.
These are 7 common rental property owner mistakes you should avoid making yourself. If you are just starting out, it may be in your best interest to hire a property manager for your Emerald Coast property. Just make sure to do your due diligence before hiring one.