The real estate field can be a tricky one to navigate, but it can also be an exceptionally lucrative field. Though there are many success stories from DIY landlords, there are also many not-so-successful ones. Learning the top 5 mistakes that DIY landlords make can help you avoid falling into the same pitfalls.
- Not Making Written Contracts
Though verbal contracts are legally binding, they can be difficult to prove in court. A written contract is absolutely necessary to protect yourself and your business. If you don’t have a written contract, it will be extremely difficult to prove when any lease violations occur.
- Not Performing Credit and Background Checks
A dishonest tenant can result in extreme consequences for a landlord. A thorough credit and background check can prevent these kinds of tenants from ever becoming a problem. Prior evictions and poor credit scores are red flags for landlords. A landlord should develop a set of guidelines and never make exceptions to these guidelines.
- Delaying Evictions
Many times, landlords become emotionally attached to their tenants. They want to help, especially when the tenant tells them the latest sob story. Unfortunately, there are people that will take advantage of this type of kindness. If your tenant isn’t paying rent, you’re losing money. Not only could you get a paying tenant for your property, but you still have to pay for the upkeep and maintenance of the property.
- Inspecting the Property
The maintenance of the property is a shared burden, especially after the tenant has moved into the property. It is necessary for the landlord to regularly conduct a thorough inspection of the property. This can help them prevent extensive damage by catching small issues before they grow into larger ones.
Vacancies are expensive, but they do happen. For this reason, a landlord should always have enough money saved in case the property is empty for a few months. Having these savings will prevent undue stress when the landlord has a difficult time finding a new tenant. This can also prevent the landlord from skipping the background check process to obtain a new tenant more quickly.