Education and news for smart DIY landlords!
Small business landlords and first-time landlords are at risk of losing money. While landlording seems like a part-time job, it takes years of experience to master. The key to minimizing income loss is to know the ways it can happen. In this blog post, I share seven causes of income loss and helpful solutions.
Some people like to rent from landlords who are not always there. These absentee landlords don’t conduct thorough background checks and so high-risk tenants can easily move in without being scrutinized. It makes good business sense to spend time with screening. Meet potential tenants face-to-face, let them fill the application, and verify their information. You’ll thank yourself later.
If something is in the lease agreement and the tenant didn’t review all the important terms with you, he is likely to break those provisions. Some of those provisions can be about rent increases, pets, and guests. Whether a tenant signs the lease online or not, encourage him to read it completely before signing.
Wouldn’t it be nice if all your tenants are good and responsible? Unfortunately, this doesn’t always happen. Whether a tenant pays rent late, neglects the property, or cause disruption to other tenants, take action immediately. If you ignore such behaviors and hope they’ll go away, it won’t be long before they become a way of life. Not around? You can always hire someone to do the work -- a property manager.
Disputes about security deposits happen because some landlords use the deposit for upgrades and cosmetic improvements. Remember that the security deposit should only cover damages caused by the tenant, unpaid rent, and unmet conditions stated in the lease.
Previously, I shared a story about a Chicago landlord who got sued because of rejecting an African-American convicted of armed robbery 20 years ago. Newbie landlords make the mistake of choosing renters based on traits that appeal to them. Gender and race do not dictate a person’s ability to pay rent. A tenant who doesn’t seem ideal for you may turn out to be the best tenant. A tenant who looks perfectly fine can actually be a tenant from hell.
Tenants are entitled to live in a rental that’s safe and livable. Make sure to pay attention to environmental hazards, keep all common areas safe, and minimize the risk of robbery or criminal intrusions. Don’t lose your money to situations you can prevent. Ignoring rental conditions is an expensive way to learn the law, and you don’t want that.
Landlords can suffer financial losses if they don’t take time to create the right policies ahead of time. Think about the day to day management of your rental. What issues would likely arise? Remember that you cannot modify the lease anytime you like.
If you’re ready, make Landlord Prep your go-to resource for landlording education. Here, we offer a complete DIY landlording course to get you on the right track. Join our academy today. If you want, you can check out Flavia’s real estate investing webinar first!