At InvestPro Properties, we have put together a list of the top 10 mistakes we see West Palm Beach landlords making on a daily basis and how you can avoid them.
- Landlords not running proper screening process. Performing a thorough criminal, background, income and rental history evaluation is imperative. When your property is vacant, you want to get your mortgage paid and you want to let anyone in. That’s a huge mistake, so don’t skimp on this step.
- Another big mistake is getting too friendly with the tenants or renting to friends and family. This is a common trap that many landlords fall into, becoming too close with the tenant and becoming friends rarely ever ends well for the property owner.
- Lack of eviction When you have a tenant who doesn’t pay, you need to know the laws for eviction and you need to know what to do. Don’t take half of the rent and don’t stop the eviction process in the middle of it. A huge mistake is setting a precedent that you aren’t serious about rent or eviction.
- Weak or Missing Documentation. If you end up in court, you’re going to need what that judge wants to see, and you won’t always know what he or she is going to ask for specifically. Some will want to see the lease; others will want to see the eviction notice. Have everything available in case you need it. Also, preparing a strong lease is imperative. This is one area you do not want to cut corners. We recommend hiring an attorney who specializes specifically in landlord tenant law.
- Stubborn landlords. If you don’t fix something for the tenant or you try to charge the tenant a large amount for a repair, you’re making a mistake. For example, if the tenant has leaky sink and you try to charge that tenant $250 to fix the leak, the tenant probably won’t call to report it. Then, you’ll end up with mold when the tenant moves out because you tried to save that $250. You are legally obligated to fix things and it’s your investment property, so take care of it. Don’t let small issues become huge.
- Making your property a second job. You’re time is valuable; utilize the people who are on your team. Let professionals do what they are supposed to do to free you up.
- Paying vendors upfront with no tracking. When you are managing your own property, you are not able to get volume discounts from vendors. That means they can disappear on you. We offer our vendors a lot of work with all the properties we manage, and we still never pay up front.
- Legal issues and compliance. Property management is one of the most heavily regulated industries in the real estate business. Landlords make a big mistake when they don’t know their legal obligations. Pay attention to local and federal laws and stay in compliance. Landlords also get in a lot of trouble when they commingle funds or spend the tenant’s security deposit so remember the deposit is not your money, and you have to track and document everything.
- Landlords not viewing residents as customers. Tenants don’t work for the landlord. This is a marketing and sales business and that tenant is your customer. If you don’t treat them like the paying customer that they are, you’ll lose when they move out and you have two or three months of vacancy and no rent. Provide excellent customer service to your tenants.
- They want to do everything themselves. Landlords who don’t leverage people are making a big mistake. Remember that you don’t need to do it all. Get the right people working for you so you can do what you do best, which might be finding new investment properties, working at your own full time job or spending time with your family.
We hope you’ll avoid these mistakes. If you have questions, please contact us at InvestPro Properties, and we’d be happy to help you.