Although a lot of people think that renting out a property is easy, the reality is frequently quite different. After all, there are so many things involved in renting and managing real estate property, and in most cases, homeowners end up completely baffled when they discover that they neglected to do a wide array of things that you have helped them before things become too complex.
Because of this, you might be wondering what mistakes you should avoid making when managing your rental properties. Fortunately for all people that are asking themselves the same question, our article can provide you with the answer you’re looking for. Here is a list of the top eight mistakes to avoid when managing your rental properties:
1. Trying to Do Everything Alone
One of the first mistakes that almost all individuals make when renting out a property is that they try to do everything by themselves. This situation often causes them to spend more money than they would. For instance, you might not understand what has to go in a leasing contract or you might neglect reading it entirely, which is why you should hire an attorney that’ll explain everything to you and that’ll tell you what you have to put down in writing.
Working with a wide range of professionals throughout the leasing process is quite advisable, especially since they’ll tell you what you must do in order to do everything properly, without making additional mistakes that could cost you a lot of money. Hence, before you actually list your property on renting platforms, it might be wise to speak to a lawyer, and from there, determine what you must do later on.
2. Asking a Realtor to Manage Your House/Apartment
A real estate agent will know every single thing about managing, marketing, and selling a property, however, they aren’t experienced in managing properties. In most cases, they won’t have the right tools to successfully manage properties and they won’t know or understand all the leasing-tenant laws, which is why they can advise you to do something that could hurt you in the future. Hence, skip hiring a realtor.
3. Not Hiring a Managing Organization
Did you know that there are companies such as HelloGuest that specialize in offering property management services, ones that include booking, guest screening, and cleaning? Yup, they do exist and such organizations will make the entire process easier for you. Of course, you still might have to hire an attorney and other services, but if you want to save time, you could allow them to manage your property instead of you.
4. Not Purchasing Insurance
Generally speaking, insurance can be quite expensive, which is why most landlords choose to either not purchase it or may choose a minimum amount so that they can save money. This is, perhaps, one of the biggest mistakes you could end up making, especially since you must ensure that your property is protected in case anything bad – such as a fire – occurs. You should remember, you must opt for the right coverage.
For instance, you might want to purchase liability and property insurance, mostly because this could help you save hundreds, if not thousands of dollars. Again, it’s quite important that you understand all of the options that you have, hence, it’s always best to ask for advice from your attorney or an experienced and professional insurance company that’ll ensure that you opt for something suitable for your house/apartment.
5. Forgetting to Update Your Address
A lot of people forget to update their mailing address and you should know that this can turn out to be a really expensive mistake. How? Well, the HOA might end up charging you with some really big fines if their fees aren’t paid or if they’re paid late, hence, you could also be facing some legal issues as well. Thus, if your apartment or house is in an HOA you must contact them and update your address as soon as possible.
6. Becoming Friends With The Tenants
If there is one thing that you must remember from this list, it’s the fact that you shouldn’t become friends with the person or people renting out your property. Of course, you’ll feel the need to be completely courteous, however, this can cause a lot of issues for you in the future. But, what can go so wrong that it creates a lot of problems for me? Well, for starters, the individual might start asking for delays for the rent.
Naturally, you probably won’t have an issue in waiting a few more days, but what if those days turn into months of waiting for the rent? Besides this, they could, for instance, ask you for some really crazy things, hence, it might be best to be polite, but becoming friends should be out of the picture. Also, becoming friends with them can cause issues if you’re renting several apartments in the same building, mostly because other tenants could end up filing lawsuits if they find out you aren’t treating everyone equally.
7. Not Pricing The Apartment/House Properly
Even if you renovated the entire property recently, this doesn’t give you the right to set an extremely high renting fee for the apartment or house you’re planning on leasing. This is something that can cause the property to remain empty, which is something that you’ll want to avoid. Hence, you must ensure that you charge fair fees for the rent, especially since you’ll get more offers than if you set the fee too high.
8. Not Stating The Rules
Last, but equally important as everything else is the fact that you must ensure that you state the rules and regulations that you have clearly. Again, a lot of people neglect to read the terms and conditions of the contract, thus, you should be clear and provide guidelines that can reveal what can and cannot be done. Also, ensure that the tenant completely understands what you’re saying, especially since this can ensure that you don’t have problems in the future.
Though you might have thought that you only need to set a price and list your property on a renting platform, there are so many more things that you must do. By following the advice we’ve mentioned above, you won’t only guarantee that you protect your real estate, but you’ll make sure that you save money in the process as well.
Since you’re now well aware of the mistakes you must avoid making, you shouldn’t spend any more time reading guides similar to this one. Instead, you should start thinking about what you have to do in order to protect your property before you choose to rent it out to someone.