Part of being a property owner means learning from your mistakes. As a property manager, it is easy to think the job won’t be that hard, only to find out it is much harder than you anticipated. From charging too much for charging too little, here are some of the most common mistakes from the DIY landlord.
Not Knowing What to Charge
Over-estimating rent rates can be a complete disaster. Most landlords will buy rental properties hoping it will allow them to have income for life or a second income. However, after investing money into renovating a property and trying to find tenants, and failing, some landlords end up with massive amounts of debt and no prospects to help them out of it. Renovations do help to make a property look great, but it isn’t going to be enough to help you bring in the right tenants. You need to know what to charge based on the economy and the area you are trying to rent to people. One way to find out what to charge is to take a look at Craigslist and see what other people are charging for similar properties. Gaining this insight will help you see if you are in-line with other properties on the market.
Failing to Perform Maintenance
We often think we can do everything thanks to YouTube how-to videos, but its just not the case. When it comes to home maintenance, not everyone can do it all. You need to know what your limitations are and what you can do. You may think you’ll save some money by doing some of the maintenance yourself, but you could end up hurting the property more than helping it due to improper maintenance. Renters also want to know they can trust the landlord to handle property issues promptly and correctly. If you have to fix something multiple times, it won’t be long before tenants start looking for a new place to rent.
Failing to Evict Someone
When should you evict someone? This is a hard thing for new DIY landlords as they often try to be friends with the tenants initially instead of acting like a business transaction. While you do want to be friendly, you need to have boundaries. If you have someone in clear violation of the contract, you need to start the eviction process immediately. Failure to start the process early can leave you vulnerable to people that will not pay late fees and will continue to pay late month after month. Avoid getting into the habit of accepting partial payments, this only sets you up for failure and shows weakness to a renter that doesn’t have proper money management skills.
Underestimating Expenses
Managing a property is not cheap. DIY landlords often think they will save money by doing it all instead of hiring a property management company to handle everything. Unfortunately, we often see these property owners struggle financially as they fail to estimate expenses correctly. If you are dealing with some of the common problems, contact Keyrenter Chicago North today for more information on how to avoid these issues.