Top 4 Common Landlord Mistakes

Top 4 Common Landlord Mistakes:

Being a landlord is a challenging role. You need to screen potential tenants, document property
conditions, set expectations with new tenants, stay abreast of landlord-tenant law, handle
maintenance problems, and much more. It’s not surprising that landlords make some mistakes
while dealing with all of these issues. Unfortunately, those mistakes can be quite costly.

What sort of mistakes are typical for landlords? Let’s take a look at four common problems and
their solutions.

1. Insufficient background screening: The key to successfully choosing applicants is to
use a consistent, strict selection approach that begins even before you list the property.
First, you should write down the criteria that you are comfortable with for your tenants
and ensure that your criteria don’t violate any fair housing laws. Next, thoroughly screen
potential applicants before you rent to them. This includes everything from running a
credit check to obtaining references from previous landlords. It’s a good idea to use a
standard set of questions that you ask each applicant. Take careful notes and flag any
potential issues. And never rent to someone just because you like them or feel sorry for
them. It’s a recipe for disaster.

2. Not correctly documenting the condition of the property at the time of move in.
Before your new tenant moves in, it’s essential to complete a detailed property condition
report. This report should include photos and video documenting the condition of the
interior and exterior of the property. Share the report with all the residents and be sure to
point out any imperfections or pre-existing damages so all parties are covered. Offer the
tenants the opportunity to add to this report within a certain time period of them taking
possession of the property (we suggest 72 hours). This way, everyone is on the same page
from the start and you can avoid any future property condition disputes.

3. Relying on tenants to actually read the lease to understand your expectations. Let’s
face it – even the clearest and most comprehensive lease will most likely never be read in
detail by a prospective tenant. People just don’t have the time or interest to read all of that
legal language. As a result, most tenants don’t really understand your expectations. The
best solution? Create a resident handbook that mirrors the information in the lease but is
presented in a much easier to read format. The handbook should clearly spell out
information such as the following:

 How to pay rent
 What to do if you can’t pay your rent in full on the day it is due
 How to report maintenance issues
 How quickly tenants will get their deposit back after moving
 How often you will be inspecting the property
 How you expect the property returned to you at the end of the lease

Obviously, the clearer and more detailed you are in the resident handbook, the better off
everyone will be. That’s why it’s well worth the time and effort to put a resident
handbook together.

4. Renting to family or friends, or even friends of friends: Family and friends might
well be good prospective tenants. Unfortunately, many landlords become lax when
renting to someone they already know. They fail to run appropriate background checks,
or have the correct lease agreements or documentation in place to address a situation
when things don’t go as planned. The solution is to treat family and friends as you would
any other tenant. Ensure that you have all the correct documents and license requirements
in place and that you properly set expectations. Otherwise, the situation can easily
backfire and create a serious conflict that affects both your professional and personal life.

It’s easy to make mistakes as a landlord. The best way to avoid complex and costly issues is to
hire a savvy property manager to oversee your residential real estate.