These Are The 3 Mistakes A New Landlord Needs To Avoid
Investing in real estate comes in many forms. One of the tried and true ways to make money off of property is to become a landlord and rent it out. This is a great time to be a landlord since the market is hot for rental properties. There is a shortage of rentals so owners are making a lot of money.
There are a lot of new landlords around as a result of the hot market. Many of them are making a lot of common mistakes that are affecting their ability to make money, however. Some of these mistakes have them leaving money on the table while others are responsible for their investment failing completely. In this article, we will cover some of these mistakes so you don’t repeat them.
1 – No screening tenants
The ideal situation for every landlord is to have tenants that stay for years. This is because they are good tenants that pay on time and respect the property. Also, when tenants move out every time the lease is over, it costs money and resources to replace them. You’ll save a bundle by having good tenants.
There are companies that will handle screening tenants for you so you aren’t likely to make a mistake. For instance, the best rental property management companies in Etobicoke have a system that they will use to screen any tenants that apply. They can also do things like manage the rent payments and take care of maintenance if you are looking for a passive income from your properties.
2 – Neglecting the property
Unfortunately, landlords have a reputation for not wanting to make repairs and do maintenance on their properties in an effort to save money. The reality is that not taking care of the property has no benefits in the short or long term of the investment. This is because you’re simply delaying the problem. As many people are aware, delaying problems makes them more expensive to deal with later on.
There is a domino effect that happens that becomes quite costly. For starters, small problems that are left to fester will end up becoming bigger problems that cost more to fix. Prevention is usually the best medicine.
Then, there is the issue that you will lose good tenants who don’t want to pay for a property that is neglected. It will cost you more to find tenants and finding good ones will be difficult.
3 – Not understanding the market
Buying a property requires understanding the location and who is renting in that area so you make a wise purchase. For instance, if you buy a house in a university area then you have to make sure that the property matches what students are looking for and also understand how much you can charge for it.
Getting this wrong can mean having a property that brings in very little income and has gaps when there are no tenants since it is not what they want.