Being a landlord isn’t easy.
The pressures of keeping a property rented out and maximising ROIs can make even the most experienced landlords make silly mistakes.
As a landlord, the worst mistakes are the ones that don’t look like mistakes at all. What makes these so bad is that they seem harmless and work to your benefit at first. But in the long run, they end up costing you a lot more money and resources.
If you want to be a better and more profitable landlord, it’s best to avoid mistakes like these as much as you can. Here are five that we see many landlords make:
1. Approving applicants right away
We get it: It’s tempting to approve any applicant who can pay your rent, especially if the rental market is sluggish. But if you don’t do your due diligence in screening applicants, then you could end up with bad tenants on your property.
There’s a variety of bad tenants out there, ranging from those who miss some payments (a minor headache) to those who badly damage properties (a major and costly problem).
Yes, it takes time and effort to screen applicants. But if you don’t do it right, you could end up with tenants who cost you even more time and money in the end.
Save yourself the trouble by making sure you always screen applicants and conduct the right background checks.
2. Putting off maintenance and repairs
Maintenance and repairs are big expenses, so it’s easy to understand why many landowners delay them until they’re absolutely necessary.
But doing this will often end up costing you much more in the end.
Addressing maintenance and repair requests as soon as possible is important because some issues can worsen and damage your property quickly (e.g. plumbing issues, mould growth, pest problems).
The longer you put off maintenance and repairs, the worse those issues are likely to get. And when that happens, you’ll spend even more time and money repairing them than you would have if you fixed them when they were first reported.
If your tenant reports a maintenance issue, or if you notice anything that requires repairs, make sure to get it done sooner rather than later.
3. Setting the rent rate yourself
As many landowners have learned too late, there’s a difference between the rate you want and the rate that’s right for the rental market.
We all want to set a high rent rate to get higher returns but setting the highest rate possible will often drive applicants away and make finding the right tenant more difficult.
Some landlords also make the mistake on the other side of the spectrum, setting the rate much lower than what it should be, simply to get someone to rent their property.
Avoid setting your rent rate too high or too low by doing your research, understanding the market in your neighbourhood, and consulting experts who know to price rental properties accurately.
4. Skipping insurance
Many landowners like to save money by not getting landlord’s insurance for their rental properties.
But the money you save by not getting this insurance may be nothing compared to what you’ll need to pay if your tenant is suddenly unable to pay your rent or if your property becomes badly damaged. In such cases, the rental bond may not be enough to pay these costs, and you’ll end up paying for them out of your own pocket.
Landlord’s insurance is there for a reason: to protect you (and your tenant) from situations like these.
To avoid this, it’s important to not only get the right landlord insurance for your property (including property insurance and liability insurance), but also to get the right coverage for your needs.
5. Treating it like a hobby/side project
Being a landlord is many things. But one thing it’s not is a hobby or a side project.
Managing a rental property properly (and profitably) demands a lot of time and work. Many landlords spread themselves too thinly between different properties and do the bare minimum (or even less) of what they’re supposed to do. And while some can get away with it for a while, they often end up getting caught by unhappy tenants, costly damage to properties, and expensive fines and penalties from regulatory bodies.
Property management is not something you do half-heartedly – it requires your full effort and attention.
If you want to be a successful landlord and make the kind of money you want from it, you need to treat it like a full-time job – because it is!
If you don’t have the time or energy to manage your property, then simply hire a good property manager to do it for you. This will help ensure your property and tenants are taken care of.
Need Help with Your Rental Property?
If you need more advice for managing your rental property, or if you want professionals to manage your property for you, give us a call on 07 3188 7651 or send us a message. We can help you save time, money, and effort in managing your property – not to mention get higher returns on your rental.