We have been renting out property for over 27 years. We’ve heard hundreds of war stories from and about other landlords. And now that we are a professional property manager now were we inherit ‘sick’ properties from other landlords for a variety of reasons. This list, while certainly not complete, represents the most common mistakes we see individual landlords make.
1. Rental is not taken seriously. We’ll admit it, we didn’t take it seriously either in the beginning! It wasn’t until about the 3rd or 4th property in our portfolio that we realized “Hey, this is some real money we’re dealing with here!” Well, if it is good enough when you have 4, it is just as valid when you have one! Treat your rental like a business instead of a hobby. Hobbies you do for pleasure and lose money at. Does that describe your rental? I didn’t think so!! (OK, maybe the losing money at! lol)
2. Not enforcing the lease. We did this early on, too. Then we realized the tenants didn’t know which elements in our lease were “hot points” for us and which ones we would let them slide on. We found it was a whole lot easier if we just followed the lease — and enforced ALL of it. Not just paragraph 24, but ALL of it!!
3. Letting rent slip. I can’t believe how many owners come to us and tell us their tenants are 3 or more months behind on rent! Tell me you are kidding, right? Tenants will test the waters — either consciously or unconsciously. You owe it to them, your spouse, to everyone to enforce the terms of the lease. (See item 2 above.) When our tenats are late we put them immediately on a payment plan that they specify. We then hand them a 3-day Pay Rent or Vacate Notice and tell them that as long as they stick to the plan we will not pursue the notice. The choice is theirs after that.
4. Not maintaining the property. Look, you are going to have to fix it sooner or later. So you have two choices. You can fix it now and keep the problem from getting bigger and keep your tenants happy OR you can bleed the property, make the tenants unhappy and/or attract undesirables who don’t care where they live and risk an even bigger fix later on. If it takes you longer than 2 sec. to choose then please go to the back of the line!!!!
5. Minimizing the legal. Many landlords fail to understand that tenants have rights, too. They think they can make up their own rules. Wrong! Discrimination is a big no-no. But so is making up your own rules contrary to the law. If you are going to make up rules, then you had better also study up on ones you can and cannot make up!
6. Not screening the prospects thoroughly. In our hurry and greed to get the property rented, we ‘overlook’ issues, or hurry through the process, or don’t even complete it. We end up with lousy tenants instead of good tenants. You’re not happy. Their probably not happy because you are nagging on them. No one is happy. Save everyone a lot of heartache and do NOT shortcut this important task.
7. Being gullible. So many landlords believe waaay too many stories. I used to, too. Now when I hear a prospect tell us how their brother’s uncle’s cousin’s barber’s sister stole their identity, I empathize over the situation…and then make them back it up with independent, verifiable documentation (in this case, a police report). No documentation? Sorry. Simple as that.
There are a ton more we could list here — from not keeping good records to not inspecting the interior often enough. We’ll leave it to you to complete the list. But if you find the same pattern or patterns repeating themselves over and over then you need to take a good look in the mirror and make a decision — either change, sell the property, or turn it over to a property manager. Best of luck!
Peter Nelson is the Prsesident of Full Service Property Management. Full Service PM provides a full suite of property management and services to the greater Seattle, WA area. He has been maanging property for over 28 years. He may be contacted through the website at www.fullservicepm.com.