Becoming a landlord is a great way to make an extra monthly income. However, it is not without its challenges, and this is something that most landlords tend to learn the hard way. After all, there is a lot that needs to come together when managing properties and letting them to people, especially as your portfolio grows and grows. This is not said to put you off – simply to ensure that you are prepared so that your new venture goes as smoothly and successfully as possible. With that being said, continue reading to discover some of the common mistakes that new landlords make so that you can avoid making them.
Trying to do everything themselves – There is only one place to begin, and this is with trying to do everything yourself. It is understandable that you would want to try and manage all elements of your property yourself in order to save money. However, if you do this, you are going to need to be available all of the time. You can’t expect your tenants to freeze for a week due to a broken boiler because you are on holiday. This is why it is a good idea to team up with a reputable property management company that can take care of all of this for you.
Not running sufficient checks on tenants – Yes, you want to ensure that your property is rented out as quickly as possible. However, you do need to ensure that it is rented out to the right people. If you do not carry out sufficient checks, you could end up with a nightmare scenario on your hands. The last thing you want is tenants that destroy your property or do not pay their rent.
Assuming the property is always going to be rented out – Another mistake that a lot of new landlords make is base their financial projects on the property being rented out all of the time. After all, there are going to be periods whereby you are looking for new tenants and so your property will be vacant and you do not have rent coming in. You need to take this into consideration when estimating how much money you may make from your venture.
Not having an emergency maintenance fund – Last but not least, you need to make sure that you have a maintenance fund so that you can quickly and efficiently respond to any problems at your rental property. Do not underestimate the costs that are associated with this. After all, you never know what could happen. The boiler and the oven could break within a week of each other, leaving you with two big replacement bills.
As you can see, there are a number of mistakes that inexperienced and new landlords tend to make. However, now that you are aware of the most common errors, you know exactly what to avoid when managing properties yourself. Good luck!
This is a collaborative post