Mistakes Landlords Make With Investment Properties Winston Rowe and Associates
Managing an investment property is no easy task. It may sound like big money, but if you are not prepared it can turn into a huge money pit.
Choosing the Wrong Tenants
This is one of the biggest mistakes you can make as a landlord. If you are renting your property out to a stranger, you must take the extra steps needed to make sure you get the best possible tenants in your property.
If you do not know them very well, there are certain precautions you can take. Have them prepare the following:
Have prospective tenants complete a written application form. This will include standard renter's information such as names, numbers, employer, previous residences, income, etc. Each adult who will be living in the property would need to fill one of these forms out and minors can be added as well. They would sign that all the information they provide is accurate to the best of their knowledge.
Credit and Background Checks:
Tenant screening is a great way to see how financially stable your prospective renter is. Credit reports often show if someone has been late on payments and the amount of debt they already have. A background check is very important, not just for your peace of mind, but also in consideration of the neighborhood.
Asking for referrals from past landlords and current employer is a great way to go the extra mile in finding the perfect tenant.
Failing to Create a Thorough Lease Agreement
Creating a good lease agreement is where part of your research will come in handy. Many landlords will print the first form they see on the internet. Unfortunately, this form could be outdated and only relevant for a certain location. Use an attorney to draft a lease agreement for you.
Lack of Communication
If you make yourself unavailable to your tenants, you are doing them and yourself a disservice. Your office should always be open and you should always be available by phone. Sometimes, home emergencies will come up and your tenants will need your 'okay' or your help to get the issues resolved.
Setting the Rental Rate Too Low or Too High
Make sure you are setting the rental rate within the correct range for the property's age and location. There is such a thing as setting the price too high and too low. If the rent is too high for the area or for how old the property is, no one will want to live there.
Delaying Eviction Process
If you do find yourself in the position of having to evict a tenant, try to get the process started as soon as possible. You can expect it to take about 30 days from start to finish, but many times, it is delayed because tenants will come up with excuses.
Being a landlord is a tough role! If you avoid these common mistakes that most people make with their investment properties, you should have an easier go at it. The main thing to remember is that the more research and preparation you put into renting out your property, the more return you will see on your investment.
Published by Winston Rowe and Associates. They can be contacted at http://www.winstonrowe.com