Are you new to managing properties? Or have you been managing properties for a while, but find yourself struggling to do so effectively? Well, you’re in the right place. In this article, we’ll cover some common landlord mistakes and provide advice on how to avoid them.
Mistake 1: Not Vetting Prospective Tenants
Believe it or not, there are a lot of landlords who don’t perform any type of credit check, background check, or verify income for their prospective tenants. When you think about it, this is pretty irresponsible. Most laws are designed to protect the tenant (even in cases where they fail to make a rent payment); landlords need to protect themselves by really getting to know who they may be renting to.
They can do this by simply asking the prospective tenant to fill out a thorough application. Additionally, they should require the applicant to prove income, provide their social security number, past rental history, references, etc. Obviously, this will help the landlord decide whether or not the prospective tenant is reliable, pays their rent, and takes care of their living spaces; however, it’s also important because the more information a landlord can get about their prospective tenant up front, the more insurance they will have later on if their tenant doesn’t pay or ends up taking off without warning. It’ll allow the landlord to track down their tenant for overdue payments and recoup some of their money.
The one caution we will give in regards to applications for prospective tenants is to not ask any questions that would be considered discriminatory in regards to the Fair Housing Act. Some examples of topics to avoid in both the application and in conversation are religion, sex, ethnicity, race, marital status, etc. Using these topics as filters for tenants is against the law and will lead to serious consequences.
Mistake 2: Relying on Verbal Agreements
Some landlords also forgo actual leases, which can lead to serious problems for both them and their tenants. Without a written lease, no one can prove how much (or when) rent is due. The same goes for any other important details or requirements. As in any other legal situation, written contracts (in this case, a lease) are beneficial for all involved.
There are many free resources online to find example leases if money to have one custom-drafted is an issue. Saving a little money upfront may lead to losing a lot down the road; it’s extremely important to do everything thoroughly from the beginning.
Mistake 3: Entering the Property Improperly
Though the exact timing varies by state (and even county), landlords must give notice to their tenants to enter the property for any reason including showings, repairs, or inspections. Typically, this notice needs to be given 12-48 hours prior to entering the property. The only time a landlord does not have to provide advance notice of entry is in the case of emergencies. Just like we explained in the mistake above, it’s best to provide this notice in writing so you can prove notice was given and avoid legal issues. The bottom line is that if there is no emergency, notice needs to be provided.
Mistake 4: Ignoring Proper Procedure (Late Rent and Evictions)
Some landlords jump down their tenant’s throats when rent is a day late. Not only is this extremely off-putting, it’s counterproductive and can lead to high turnover due to bad relationships. In many cases, tenants have a very simple reason their rent was late including innocently forgetting to send the check. Coming to them in an understanding way to find out why they haven’t paid yet will usually yield better results. To prevent late rent becoming a frequent occurrence, your leases should include a section outlining late fees and other consequences. If tenants know ahead of time their actions will have repercussions, they’ll likely be more diligent in paying.
To take the same situation of late rent a little further, let’s say the tenant still hadn’t paid after promising they would and are now well beyond the deadline. The biggest mistake you can make as a landlord is to take matters into your own hands. Your first instinct might be to lock out the resident or shut off their utilities to motivate them to pay their rent; however, both of those actions (and other “self-help” remedies) are illegal.
The correct way to face this situation would be to start the eviction process right away through proper legal channels. We wrote an entire article that outlines this process in detail and also gives tips on other actions landlords should avoid while taking steps to evict a tenant.
We hope this information will help you avoid mistakes like these in the future. If you find yourself feeling overwhelmed dealing with tenants and the laws that come with renting properties, reach out to us about how we might be able to help take the burden off of your hands. Click the contact box to the side and we will reach out within 48 hours to discuss some of your options.
Please remember this content is purely informational – not legal advice for your given situation.