As diligent as you may attempt to be in the management of your property rental business, even the most common mistakes can cause significant problems and perhaps legal troubles. Understanding those common pitfalls and how to avoid them can help you to run your property rental business in a more efficient manner.
Surprisingly, one of the most common mistakes that many property owners make is failing to raise the rent. In order to ensure that your business remains successful, you must keep your finger on the pulse of the local rental market. Increases in rent are necessary to ensure that increases in property taxes and maintenance costs are covered. When you choose to raise the rent is discretionary; however, many landlords find it easiest to do this when the lease comes up for renewal. Regardless of how great your tenants may be, you simply cannot afford to keep rents the same when costs are increasing.
Not conducting tenant screening is another mistake that is all too common among many landlords. While your gut feeling may have served you well in other aspects of your life, when it comes to operating a property rental business, you must check with previous landlords, employment references, and conduct a credit check and thorough tenant background screening. This should be done for every potential tenant. If for no other reason than to ensure that you are not wrong about your first impression regarding a tenant, the screening process also helps to protect you from possible claims of discrimination.
When it comes to discrimination, landlords can often unwittingly cause problems by treating tenants differently. Rules must be enforced for all tenants. The key to avoiding claims of discrimination is to ensure that you treat all tenants fairly and equitably. Not only is it the right thing to do, but it ensures that you are not left vulnerable to complaints of fair housing violations.
It is also imperative that you make sure you are clear regarding rules, expectations, and policies. If you have found in the past that tenants seem to have a problem following your policies, there is a possibility that it is because you have not been diligent in clarifying your policies. Take the time to be clear and explain all policies regarding rental payments, pets, parking, security deposits, smoking, maintenance, etc. This should help to reduce problems and will make it much easier when tenants do refuse to follow policies and you need to take action.
Finally, do not be the landlord that is a pushover when it comes to late rental payments. Yes, everyone has problems from time to time, but you are still running a business. Make sure tenants know when the rent is due and when it is not paid on time, follow up with whatever is spelled out in the terms of the lease agreement. Automatic or online rental payments can help to resolve much of this problem and make life easier for everyone.