3.
Charging overly high rent rates – A lot of first-time landlords immediately think that the best way to make money off of a rental property is to set high rent rates. The problem with this, however, is that it doesn’t cater to the potential tenants or give them any kind of incentive to want to live in your rental property. It is important that you put yourself in your potential tenants’ shoes. At the most, how much would you be willing to pay? Many landlords end up not being able to fill their rental properties with great tenants simply because their rates are set so high.
4.
Getting advice from family and friends – People always have opinions, especially the ones who are the closest to you. And when it comes to running a business, which is essentially what you are doing, it is better to get advice and practical wisdom from someone you are not emotionally connected to rather than a family member or a friend. While there are many horrible tenant cases, there are also many success stories. Make sure you connect with landlords who have had success in this business and glean from them. Plus, the people who don’t have success stories most likely made a lot of the mistakes being laid out in this blog post. The fact that you are reading this is a step towards success!
5.
Underestimating or failing to calculate maintenance expenses – While every landlord wants to give his or her tenants the benefit of the doubt, there is a high chance that your tenants will not take care of the property as well as you think they will. Intentionally or unintentionally, damages do occur. It is important that you calculate and set aside some money as a safety net for potential damages or maintenance repairs. Landlords who fail to do this or underestimate the cost of potential damages and repairs end up in the hole and their rental properties are left worse off than when they started.
6.
Failing to keep a business-professional relationship with tenants – Many landlords end up in the hole because they allow their relationships with their tenants to become personal and they continue to extend grace when they should be abiding by the lease agreement and sticking to the requirements. Your tenant is essentially your customer. This means that in the same way a customer gives a payment for a product or service, your tenant essentially gives you a payment for a “housing” service. Imagine a customer walking into a business and taking a product without paying or receiving services and then walking out without paying. Not only would that be disrespectful, it is actually illegal and there would be no grace offered for those kinds of actions. It is the same way when it comes to your tenants failing to make rent payments. The requirements must be directly and sternly communicated and if your tenants fail to meet them, legal actions must be taken. The landlords who fail to do this because they don’t keep their relationships with their tenants business-professional are the ones who end up in the hole in the end.
If you have any questions or would like more information on how you can succeed as a first-time landlord, feel free to call us at 530-410-6085! We do
property management in Redding and Shasta County and would love to help you in any way we can!
