DIY landlords are presented with unique challenges since they need to accomplish a variety of tasks on their own. While maintaining their rental property, they also need to manage their tenants’ concerns, market available units, screen prospective tenants, and remain up-to-date on rental laws.
For new landlords, it’s inevitable to commit a mistake due to the great number of duties you’ll be performing if you choose to self-manage the rental unit. Read through this list of common mishaps that you’ll want to avoid as a DIY landlord:
1. Not Having a Written Leasing Agreement
Crafting a lease agreement can take up a lot of time, especially for DIY landlords but it doesn’t mean you should forego doing it. If you’re renting out your unit to a friend or close relative, you may think it’s unnecessary to have a written contract but this isn’t the case.
A written lease protects both the landlord and the tenant. It can also be shown as legal proof in court. Simply relying on a verbal agreement can place you in a sticky situation since it would be hard to prove your case. With a signed leasing agreement in your hands, the terms and conditions contained can be a reference and evidence.
Without a written agreement, it can also be tough to enforce property policies and renters won’t have a guide to refer to.
2. Skipping a Thorough Property Inspection
With a rental unit in excellent condition, you can easily make your tenants happy and even retain them for the long term. But this requires attending to the upkeep of your rental space so that it’s habitable and continues to add value and comfort to the residents.
As a DIY landlord, it’s on you to schedule a regular property inspection. It also helps you check whether the renter kept up with their share of maintenance duties and properly disposed of their trash. What’s more, it’s required to evaluate your security systems to ensure the safety of the occupants in your rental.
3. Delaying Advertising a Vacant Unit
Eventually, a landlord experiences a vacancy but this need not be a stressful situation as long as you employ effective marketing strategies. You want to have a proper marketing plan in place and act quickly. Since you’ll also be conducting tenant screening, it may take some time before the vacancy is filled out.
For DIY landlords, you must be ready to multi-task and market, prepare your unit to be rent-ready, and arrange property showings. Keeping a 3-month budget as contingency funds also helps you cushion repair costs, cleaning fees, and maintenance expenses.
4. Failing to Enforce Lease Policies
Unlike property managers that have built a professional distance from renters, DIY landlords can find it challenging to establish boundaries with their tenants. This is a drawback since rules may not be enforced firmly. For instance, you may fail to enforce late fees on tenants who haven’t paid their rent on time. This hurts your rental income since you miss out on accessing your funds quickly.
DIY landlords should not lose sight of the fact that they’re running a business. As such, terms and conditions need to be respected and followed. Otherwise, your investment returns can suffer if renters pay the rent late or don’t respect the property.
To counter this situation, you may want to hire a property management company to handle the different sensitive situations of renting a property. Property managers can be firm with the lease and talk directly with tenants to manage situations. If there’s no other resort, they can also move forward and evict the renter to reduce your financial losses.
5. Failing to Perform Background Checks
A critical mistake that’s made by DIY landlords is insufficient checking of a tenant’s rental history. This exposes them to potential problems like skipped rent payments, property damage, or complaints from neighbors. It’s imperative to conduct credit and background checks to avoid the headaches that bad tenants bring.
It’s advisable to communicate with former landlords so you can decide whether or not to accept a prospective occupant. Income losses can add up in terms of non-payment of rent and property damage. It’s best to reject renters who have a history of negligence. Note that your screening process should conform of the Fair Housing Laws.
6. Underestimating How Much Time Self-Management Takes
Being a DIY landlord can take up a lot of your free time. You’ll be dealing with property issues, tenant complaints, and vendors repeatedly. Even handling a single unit can be time-consuming. If your investment portfolio is increasing, it can easily leave you juggling a variety of tasks by yourself. Engaging the services of a property management company can be a smart move.
When a maintenance emergency occurs, it can be easy to feel pressure as a DIY landlord. You would need to have reliable contractors to attend to the urgent situation right away. A property management company, on the other hand, has the skills and systems in place to address any issues at any time of the day or night.
Mistakes can lead to tenant turnovers and result in financial losses. Make sure you have a clear lease agreement in place, maintain professional relationships with tenants, enforce policies, and market your properties effectively.
You can also consider partnering with a reliable property management company and have them oversee the day-to-day tasks that come with running a rental property.
If you want to have peace of mind, partner with Keyrenter Property Management Hampton Roads to have a dedicated support system to help you run your rental home successfully. Contact us today to learn more about our services!