Being a landlord can be profitable and fulfilling, but it is easy to make mistakes if you are not careful. Do not think of being a landlord as something you can do passively. You must be aware of landlord-tenant laws at all times and follow proper and legal procedures.
If you make missteps, you could end up in legal trouble, debt or both. Here are the top mistakes you should avoid when renting.
1. Underestimating expenses
Renting out a property is not a one-way ticket to wealth. While you are likely prepared to cover taxes and insurance, do not forget about these crucial costs:
If you do not account for these costs, you could rack up debt fast. Make sure you set aside funds for emergencies, too.
2. Not checking on the property frequently
According to TIME Money, one of the most detrimental landlord mistakes is relying on your tenant to inform you about issues. Your renter might not mention a broken rain gutter. Before you know it, it could break and cause thousands of dollars in water damage. While you should always give your tenant privacy, you should lawfully make inspections and repairs whenever necessary.
3. Ignoring renters insurance
Hopefully you are already looking into insurance to cover your property, appliances and liability. In addition, do not neglect renters insurance. If your renters realize their belongings are not covered when something goes wrong, it can cause a lot of problems. Renters insurance is not an absolute requirement, but it is at least worth considering. If you do not want to cover it, make it clear to your tenants and suggest they get their own policy.
Avoiding these mistakes can help reduce the chances of disputes with your tenants. When you undertake becoming a landlord, be sure you are aware of all applicable laws as well as keep in mind the problems that may arise with renters.