Thinking of becoming a landlord? Owning your own rental property can be a great way to make money. Plus, you get to be your own boss. But being a landlord can also turn into a big pile of stress and hassle if you’re not careful. Renting out properties could turn a good income and pave the way for future investments, but you’ll burn out fast if you make these common landlord mistakes.
You didn’t get everything in writing.
It’s an easy mistake to make, especially if you’re renting to family or friends. (Here’s a pro tip: never, ever rent to family or friends. You’ll ruin relationships if you kick them out after they fail to pay rent, and you’ll lose money if you don’t kick them out. Avoid that situation 100 percent.) Landlords who are just starting out often agree to some things with a smile and a handshake, but if you want to be protected by the law, you’re going to have to get it all in writing. Better safe than sorry, so make your lease and application several pages long.
You didn’t screen your tenants.
When you end up with an ex-convict or someone who yells on the phone at 3 a.m., you’ll have complaints from all your other tenants. How did you end up with a tenant like this? Well, the answer is probably because you didn’t screen them. Always screen your tenants, and besides — why wouldn’t you screen your tenants, when you have the option of free tenant screening with an online platform like Turbo Tenant?
You didn’t look up all the laws.
If you don’t know all the laws before you rent your building, you’re in for a hassle. You might be tempted to do things your way, but if your way involves turning off the heat when tenants are late with their rent, you could end up on the wrong side of the law. You might also fail to take action when you don’t know the law, not realizing when you can legally evict a tenant.
You didn’t act like a business.
It’s easy, when all you’re renting is a unit or two, to treat your property as a hobby. After all, you’re only spending a few hours a week running your property. You might be tempted to let repair bills fall behind your desk, never keep track of utility costs, and let rent checks sit around for a few days. Even if your workload is slim, however, you should always treat your rental like a real business. Keep detailed records. Stay organized. Your utility bill spreadsheet will help you calculate costs for next year, and an organized filing system will make any emergency easier to deal with.
You let things get personal.
Remember that, at the end of the day, you’re running a business, and your business isn’t you. New landlords can get drawn into sob stories and feel terrible evicting a tenant or denying their application. As a person, you might want to be altruistic and give them a helping hand. As a business, however, you have to protect yourself. Have strict rules and stick to them, even when it’s a tough situation to see. At the end of the day, it’s best for everyone if you don’t let things slide, so make sure you don’t let personal feelings in the way of running a reliable business.