Mistakes of a Rookie Landlord
Updated: Jun 3, 2021
We’re all rookies at many points in our lives - new school, new job, new team. Perhaps you’re a rookie landlord. Being a rookie isn’t a bad thing, necessarily. It just means that you aren’t experienced, and often translates to mistakes.
My job is to advocate for Buyer, Seller, Tenant and sometimes, Landlord. I get quite a few questions from people interested in renting out their homes, as well as many questions that are the result of a problem or sticky situation. The most common are a result of:
Rookies suck at screening tenants - the most important steps in a proper business relationship is screening potential tenants. Many people take potential tenants at their word, without a full background or credit check, thinking this will save time or money. But numbers and data don’t lie. Bumps and bruises don’t mean that a potential tenant is bad, but deserves explanation - and it’s better to be in the ‘know’ than in the dark.
Rookies don’t treat their rental property as a Business - This means co-mingling funds, losing receipts and invoices, and keeping things unorganized in general. This type of endeavor is not a hobby, it’s a business. If you want to make money, you will need to treat it as such. Same goes with the inability to get everything in writing. You will, in fact, have a later “I thought you meant…” moment unless everything is in writing.
Rookies accept sob stories - Late payments come with sob stories. This is to be expected with life’s complicated ups and downs, but if you let a tenant slide once or twice, then guess what? Does a bank let you slide? Does a lender let you slide? Circumstances change, sure, but be prepared.
Rookies don’t understand the costs associated - Are you familiar with contractor costs? The expenses of snaking a plumbing line? The fees for utility transfers and other charges? A well versed agent has had experience with these and more, and can offer you sound advice, through the life of the tenancy.
Rookies don’t pop in - Just because you don’t hear from a tenant, doesn’t mean everything is gravy. Routine visits to the property are necessary to check out safety and health issues at minimum.
When money is involved, it’s in your best interest to hire a professional that treats your investments the way they should be treated - like a marketable asset. Put an advocate in place to look out for your best interest, and guide you in making appropriate decisions, keeping records for your protection and covering the often missed nuances of real estate leasing.