Being a landlord is hard. It comes with a lot of responsibility and requires a solid foundation of knowledge and experience. But whether you’re just starting off or have a few years under your belt, mistakes happen. So let’s start the New Year off right! Here are the top 10 landlord mistakes to avoid!
#1: Failure to Know the Market
If you want to get your home rented quickly, you need to know where you stand amongst your competition. This means setting your price accordingly and adjusting as needed. If you’re not getting any interest in the first week, it’s time to change the price. Your worst enemy is a having a high days on market.
#2: Failure to Thoroughly Screen Prospective Renters
Doing a proper background check is crucial. You want to make sure to run all prospective renters through national criminal (including federal terrorist and sex offender registries), eviction, and credit screening BEFORE handing over keys.
#3: Failure to Use an Appropriate Lease Agreement
There are good leases and there are bad leases. Don’t settle for a template you can pull off the internet. Instead, make sure your lease is properly screened and drafted by a Colorado Real Estate Attorney. This ensures your lease is compliant with all Colorado Landlord and Tenant laws. Make sure to have your lease reviewed constantly as both State and Federal laws change. An out of date lease is just as bad.
#4: Failure to Fully Understand the Laws
Know the laws! If you’re going to be a landlord, you need to do your homework in order to be prepared for any and all situations that may arise. You need to know how to keep yourself on the right side of the law and be familiar with those you interact with on a daily basis. This includes Federal Fair Housing Laws, Warranty of Habitability Laws, Tenant Privacy Laws, and other Colorado Landlord/Tenant Laws. If you don’t, you could wind up in a lot of hot water.
#5: Failure to Adequately Address Maintenance Emergencies
Do you know who to call for a 3AM water leak? How about for a broken furnace in the middle of winter? Hope for the best but plan for the worst by having a list of vendors prepared for any maintenance emergency. Make sure to have backups just in case your first choice isn’t able to make it. That way you can address it quickly to protect your home and keep your tenants happy.
#6: Failure to Detach
Run your rental property like a business. Invest in it, maintain it, have the proper legal protection in place, and account for funds accordingly. Detach yourself from any sentimentality. If you can’t, you may want to rethink renting out your home.
#7: Failure to Routinely Inspect Your Property
One of the best ways to ensure your tenant is in compliance with the lease and that your home is well maintained is to perform routine inspections. During this time, you can complete preventative maintenance work, such as replacing the furnace filter, checking for leaks, etc. Doing so can help you get ahead of any maintenance emergencies and make sure your tenants are following the rules.
#8: Failure to Know How to Properly Evict
Know the proper steps that need to take place before, during, and after an eviction. It’s not as simple as notifying your tenant that they need to leave. Familiarize yourself with all the legal steps necessary for an eviction and know who to contact in the event you need legal counsel.
#9: Failure to Property Handle the Security Deposit and SODA (Statement of Deposit Activity)
One of the biggest mistakes a landlord can make is to think of the security deposit as their money. This belongs to the tenant and needs to be processed and refunded appropriately. Make sure you know what can and can’t be charged to a tenant’s security deposit. This means familiarizing yourself with normal wear and tear vs damage and knowing all the laws. Failing to handle the deposit and SODA appropriately can end up costing you big.
#10: Failure to Remain Neutral
Since your rental should be run like a business, your relationship with your tenant should be a professional one rather than a close friendship. It’s difficult and awkward to ask for friend for money anyways, and even more so when they don’t pay!
If you’re tired of managing on your own or don’t want to worry about making these mistakes, it’s time to call a professional! With our highly experienced team and expertise in property management, Real Property Management Colorado can put all your fears to rest. Let us manage your rental property so that you can rest easy! We’re just a phone call or click away.