Mistakes are easy to make as a landlord, even if you’ve been renting out a home for years. With the rental landscape constantly changing and laws becoming stricter, the errors that were once no big deal can unfortunately become quite costly.
Let’s take a look at some of the most common landlord mistakes we see owners make, and more importantly – let’s talk about how to avoid them.
Improper Pricing is a Mistake
Your property’s rental value will depend largely on the market, and a lot of landlords make the mistake of pricing their rental too high or too low.
Pricing your property too low means leaving money on the table. It’s also dangerous because you may struggle to ever catch up with the market rents.
Pricing your property too high means a longer vacancy period. It will take longer to find someone willing to rent your home at a price that’s too high, and you may find yourself losing an entire month’s rent before you lower your asking price and find a tenant.
Take a look at what homes similar to yours are renting for in your neighborhood. Price your home competitively to avoid those long vacancies and be willing to come down on the price if you’re not getting a lot of interest.
It’s mostly the market that drives your rental price, but there are other factors, too. Consider these things when setting a rental price:
- Property size and layout
- Property condition
- Property location
- Season/time of year
Find the best data you can when looking at rental market trends and settle on a price that’s both profitable and competitive.
Poor Tenant Screening Leads to Unqualified Residents
There is a lot of room for error during the tenant screening process.
Some landlords forget to provide a set of standard qualifying criteria. Others focus on the credit score rather than looking through the credit report for a full financial picture.
Most commonly, landlords don’t do a thorough job of evaluating the qualifications of an applicant.
Here’s what you need to successfully screen tenants for your property:
- A set of written rental criteria so you can demonstrate that everyone is screened against the same standards.
- A way to verify income and employment.
- A report that shows there are no prior evictions.
- A complete credit report
- Evidence of a positive rental history.
Bad tenants can lead to late or unpaid rent, eviction, and property damage. Don’t make the mistake of placing the wrong tenant.
Not Allowing Pets in Your Property
It’s a mistake not to allow pets.
We understand the concerns some owners have. Pets can be messy. They can be dangerous. They can increase your liability.
True, but with a good pet policy and the appropriate pet fee and pet rent collected, those risks can be contained.
The truth is, pets make you more money.
More than half of the tenants in California looking for a rental home have at least one pet. If you say an unequivocal no to all pets, you are eliminating a large portion of your tenant pool. This could mean longer vacancies.
You can put restrictions in place to protect yourself. Maybe you’ll allow one or two pets per tenant. Maybe you’ll have size and weight restrictions. You can say that dogs and cats must be older – no puppies or kittens. Dangerous breeds are often disallowed because homeowner insurance companies will not cover them.
Put together a pet policy and screen pets carefully. Allowing pets is good for your rental property.
Ignoring Preventive and Routine Maintenance
Some landlords simply forget or neglect to maintain their property.
This is dangerous. Not only are you driving away good tenants, you’re also allowing the condition of your investment to deteriorate.
If you don’t take care of preventative maintenance such as pest control, landscaping, HVAC services, and roof inspections, you’re going to find that the property deteriorates to the point that you cannot really get market-rate rents for that property any longer.
Good tenants will not stay in place when basic repairs are ignored.
Put together a solid maintenance response process. Pay attention to preventative, seasonal, and routine repairs. You’ll find this attention cuts down on the number of emergency repairs you have to make. Don’t make the mistake of avoiding maintenance. It’s more expensive for you in the long term.
California Rental Laws
Landlords have to follow fair housing laws. You have to know the timeline for returning a security deposit and you have to know the difference between a pet and a service animal. If you don’t know these things, you could find yourself paying thousands of dollars in fines. You could be sued by a tenant. You could even lose your investment home.
New laws in California have made it especially easy to make an expensive mistake. There are statewide rent control provisions, just cause eviction laws, and a requirement that you consider all Section 8 tenants for housing if they’re qualified.
When you don’t know the law, it’s easy to unintentionally break it.
Neglecting to Partner with Benicia Property Managers
You can lease, manage, and maintain your rental property on your own.
As long as you have the time, knowledge, and resources that are required to do so effectively.
We know that we live in a do-it-yourself culture, and that’s great if you’re painting a bathroom or learning a new skill. When it comes to effective property management, however, a professional will make all the difference in your rental experience. You’ll earn more money. You’ll lose less money on long vacancies, bad tenants, and deferred or unreported maintenance.
Don’t make the mistake of trying to do everything yourself. You don’t have to. You can leverage the expertise that local property managers have. We know the market, we know the tenants in this market, and we know how to position you and your property for success.
If you’d like to hear more about the mistakes you’re in danger of making as a landlord and how to prevent them, please contact us at Krystle Properties.
