First-Time Landlords, Don't Make These Common Mistakes
Posted on: 12 April 2017
Renting out property can be a good way to make some extra cash, but being a landlord is not as simple as you might think. To avoid common problems, make sure you avoid making these mistakes that a lot of first-time landlords fall prey to.
Renting to a friend without a formal contract.
It's nice to find a friend or family member who is interested in renting from you. This way, you already know the renter is responsible -- so you can skip a lot of the screening process. However, you don't want to make the mistake of renting to someone, even if they are someone you know well, without a formal lease agreement. Without a formal lease, if they were to stop paying the rent or cause a lot of damage to your property, you won't have much (if any) legal recourse. You may assume your friend would never do something like this, but situations and relationships can change quickly. You're better off safe than sorry, so have a lawyer draw up a formal lease even if you're renting to a good friend or relative.
Leaving property maintenance to the renter.
It's not uncommon for renters to ask for a reduction in rent if they complete certain maintenance tasks, like mowing the lawn or weeding the flower beds. While this may sound reasonable, it's not usually in your best interest to accept such an offer when a tenant first moves in. You don't know how responsible they are -- they may end up not completing these maintenance tasks, which will cost you money later on when you're left to deal with an overgrown lawn or garden beds. Hire a professional to do maintenance or do it yourself so you know it's done correctly and well.
Renting to someone with a questionable history.
You want your first few tenant experiences to be good ones. So, don't rent to someone with a questionable history right off the bat. If you later decide to give someone a chance after you're a more experienced landlord, you'll be better equipped to handle the fallout if they turn out not to be as responsible as you'd hoped. For now, only rent to someone with great references, proof of income, a steady job, and no criminal record. When your rent comes in on time and your property is better cared for, you'll be glad you did.
If finding tenants, maintaining property, and collecting rent end up being too much for you to handle, keep in mind that you can always hire a property management company, such as MacPherson's Property Management, to oversee these aspects of your rental. The company will tackle all of these tasks for you, simplifying your life greatly.
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