The Top 5 Mistakes to Avoid When Becoming a Landlord
Osprey Property Management | April 2022
If you're thinking about becoming a rental property owner, there are a few things to keep in mind. It's not as easy as just putting up “For Rent” signs and waiting for the money to start rolling in.
Making mistakes when it comes time for your property management needs can cause you to lose rather than make money. However, successful investors are always on the lookout for new things that can improve their return on investment, and avoiding mistakes can help make that happen!
Osprey Property Management, a Hampton property management company, knows a thing or two about what it takes to be a successful landlord—so take our advice and read on to find out what the top five mistakes are that Hampton landlords make so that you can avoid them.
1. Improperly Screening Potential Tenants
One of the biggest mistakes landlords make is not screening their tenants properly. This can lead to problems down the road, from missed rent payments to property damage.
It's essential to take the time to do a thorough screening process, checking references and credit scores, and interviewing potential tenants in person. This will help you find responsible tenants who are more likely to take good care of your property and pay their rent on time.
2. Setting a Rent Rate Without Performing a Market Analysis
When it comes to setting the rent rate for your property, it's essential to conduct a thorough rental market analysis and research to ensure you're charging what the market will bear. Hampton landlords often make the mistake of setting monthly rent rates without performing a market analysis, leading to undercharging or overcharging for their properties. When the rent is too high (or too low), you risk losing money!
To avoid this mistake, take the time to research local rental rates and compare them to similar properties. Also, be sure to answer the question "how much can I rent my house for?" with the research to back up the answer! Doing this will help you determine a fair rental price for your property.
3. Performing Unqualified Maintenance Instead of Hiring a Professional
It's no secret that rental properties require constant maintenance. However, what may be less well known is that hiring qualified maintenance teams could avoid many of these problems (and reduce your overall costs)!
Unfortunately, many rental property owners make the mistake of trying to save a buck and employ unqualified or inexperienced people to take care of their properties—or attempt a DIY repair—leading to more problems down the road: from code violations to tenant complaints and repeat repairs for the same issue.
When it comes to your property, don't skimp on quality. Hiring a professional contractor to care for your property's maintenance needs is always the best course of action. They will be able to identify and fix problems before they become substantial issues.
It may be a tad more expensive upfront, but it will save you money (and headaches) in the long run.
4. Having Unrealistic Financial Expectations
Another common mistake many real estate investors make is having unrealistic financial expectations regarding their rental properties. Some people think that being a landlord is a get-rich-quick investment strategy. However, the reality is that it takes time, effort, and the right strategies to be successful in this business.
In addition to anticipated rental income, a rental property owner must be aware of ongoing expenses, such as property taxes, insurance, maintenance costs, and vacancy rates. Frequently, these expenses can add up quickly and eat into your profits if you're not careful. That's why it's important to have a realistic understanding of what you can expect to make from your rental property before you dive in headfirst.
The easiest way to assess your rental property's potential profitability is by calculating its ROI. This helpful metric will consider several factors—such as location, property type, and amenities—to give you a better idea of what you can expect to make from your Hampton rental properties.
5. You Didn’t Hire a Property Manager to Take Care of It All
The final and arguably most serious mistake rental real estate investors make is not hiring a property manager. While it may seem like an unnecessary expense, the truth is that good property managers can save you time, money, and a whole lot of headaches.
A qualified Hampton property management team will be able to take care of the day-to-day tasks associated with being a good landlord, from screening tenants and collecting rent to maintaining your investment property and dealing with repairs. This will free up your time to focus on other things—like growing your rental portfolio!
Partner With the Best Property Manager Hampton Has to Offer
We hope these mistakes don’t sound too familiar! However, if you find that you’re losing money (for any reason) or you’re ready to see better returns, it’s time to hire a property manager.
Osprey Property Management is one of the leading Hampton property management companies! We specialize in helping landlords get the most out of their rental properties, and we would be more than happy to help you too! If you're interested in learning more about our services, or if you have any questions, please don't hesitate to contact us today. We look forward to hearing from you soon!
Learn more about what to look for when searching for a property manager! Download our free resource, the “Guide to Finding the Best Property Manager.”