The ABCs of Getting a Mortgage Loan for First-Timers

Posted on: 8 May 2017

Being new to owning rental property can sometimes mean that you make rookie mistakes that could have a long-term impact on your success. Although some mistakes are unavoidable, there are many that you can avoid. If you just became a landlord, here are some mistakes that could hurt your new business.  

Refusing to Raise or Lower Your Rates 

Although you might have a fixed rental rate in mind for your property, some flexibility could be required. Without flexibility, you could be left with vacancies more often than not. Fortunately, as the owner of the property, you can make adjustments at any time based on the market.  

For instance, if the market is slow, high rates could turn off potential renters. At the same time, if you rates are too low during a high-demand season, you could miss out on the chance to make a profit on your property.  

Skipping the Landlord Insurance 

If you have insurance on your rental property, you might feel it is enough to cover any incidents that happen. Unfortunately, this is not always true. Your homeowners insurance will likely not approve any claims if it is discovered that you have rented out the property.  

You need landlord insurance. The insurance provides coverage for rental properties and can cover incidents such as fire and break-ins. In addition to this, it can provide protection if someone is injured while on the property. Having this coverage could help you avoid costly lawsuits and protect your real estate business. 

Forgetting the Importance of Resident Retention 

The costs associated with securing a new tenant often exceed the costs of keeping the ones you have. In order to get a new tenant, you will likely spend money on advertising, background screenings, and paperwork. In addition to this, you have to go through the process of cleaning and making repairs to your property each time someone moves in and out.  

However, if you focus on resident retention, it will be more likely that tenants will stay, and you can avoid the expenses related to finding and processing a new tenant. Keep the lines of communication open with your current tenants, and take care of maintenance issues to increase the odds of keeping your tenants happy. 

Since you are new to being a landlord, you should consider working with a property management company. Skilled professionals can help you avoid rookie mistakes and take the proper steps to keep your property operating as it should.