So, you’re just starting out as a landlord and have property to offer people who are looking for a place to live. Also, you want to use your experience in business and management classes to provide comfortable houses and apartments.
However, you need to know several things to make sure you are a success. People in this industry face unexpected issues when they first start out. Here are three rookie mistakes that are often made in your situation, as well as tips for how to get around them and keep your tenants happy.
Mistake: Not Reviewing Costs
When running any kind of business, you might focus most of your costs on taxes and insurance, then assume that meeting your goals for getting a certain number of customers within a certain timeframe will take care of your finances. But you’ll need to be prepared to handle several elements, big and small, so that your wallet doesn’t empty. For landlords, these factors can include water running throughout the property, areas to put garbage, caring for gardens and keeping the buildings in good shape. Not having a backup plan for financial problems can also set you back.
Solution: Create a Financial Plan
Avoid this by estimating how much these items will cost annually so that you can plan to spend your money where it is needed. Experts advise you to save at least 35 percent to 45 percent of your yearly rental income for them, and you should be prepared to cover costs even if a tenant moves out. Emergency funds will also come in handy in case of a serious issue.
Mistake: Not Managing Repairs
Properties such as houses and apartments are susceptible to various situations and accidents that can plague tenants. These include a tree falling through the roof in a thunderstorm, a bathroom pipe breaking, a dishwasher malfunctioning or a car accidently parking over the curb and sitting on top of a garden. While rental companies have rules about landlords contacting repair professionals, some landlords choose not to keep up with these rules. Sometimes landlords want to avoid having to spend money themselves to fix things.
Solution: Keep in Touch
Staying in touch with renters and emergency services make it easier to repair damage when it happens. It will also help you build a trusting relationship with your tenants. Having someone like these commercial roofing experts in Lakewood, WA, helps you be on top of an accident, especially if a tenant is away. Call or email tenants as soon as possible to let them know what happened and that it’s being taken care of.
Mistake: Relying on Traditional Tools to Secure Information
While businesses are starting to rely more on the internet to handle information, some people will store information on paper. This can be common with rental applications for tenants, putting potential renters at a greater risk of identity theft.
Solution: Promote Online Applications
Have your tenants fill out their applications online so that their information is protected on software, in the cloud and out of the hands of criminals. Tenants can create profiles that they can share with qualified employees at your office so that data is exchanged between the right people. Doing this work online gives tenants the chance to fill out a free rental application, allowing them to save money in the process.
Keep these tips in mind so that you can build up a good reputation as a landlord.