Landlords are vulnerable to quite a few mistakes. Landlords can go wrong with the assessment of prospective tenants. There can be high vacancy rates owing to some unpopular policies or because of some financial decisions that the landlord is firm on. Just as imperative it is to conduct background checks of all prospective tenants; it is equally necessary to ensure that you don’t fall into the common financial traps. Here are some financial traps to avoid as a landlord.
- Do not ask for a very high rent and do not opt for a very low rent. Both extremes are equally undesirable. Realistic pricing per the trends and based on the type of property, the amenities and special features will be the best way forward. Consider the prevailing trends, get factual data listing the varying rental costs of properties like yours and in similar areas, preferably in the same neighbourhood, understand the strengths and weaknesses of your property and only then should you decide on the monthly rental. If you have a property manager, discuss the pricing with them before you make up your mind. Also, don’t allow property managers to increase or decrease rent without consulting you if you wish to be a hands-on landlord.
- Do not allow arrears. Many landlords are lenient and they think that one arrear once a while will not pose any graver dangers. The problem is not in one arrear or one delayed payment. The problem is that becoming a practice. You cannot be sure of the tenant’s present financial wellbeing. Allowing one arrear or worse, if you are not observing arrears, monitoring payments and following it up with your tenants, then that will pave the way for intentional missed and late payments. Ask your property manager to be stringent with rent collection.
- In both cases you may have found mention of property manager. It is better to hire a property manager than trying to do everything on your own. If you have a profession or run some business, it is best to hire a property management company and not just for rent collection but to inspect the property, ensure its upkeep and to help you during transition from one tenant to another.
- When you hire a property manager, you should bestow the responsibility of maintenance upon them. Without a property manager, you should be proactive with upkeep of the property. You may wonder that delaying some repairs will save you money but it may prove to be costlier.
