5 Common Mistakes to Avoid When Renting Out Your Property
Having a rental property is such a good investment. Not only will you have a valuable tangible asset to keep, but you will also have a source of income to keep you financially stable for many years. However, renting out your property comes with various responsibilities and different liabilities. You have to consider promoting your vacant unit, looking for a quality tenant, collecting monthly rent payment, addressing tenant’s concerns, and maintaining your property. To handle all these responsibilities, hiring a property manager can make all the difference in your efforts, especially if you don’t have the time.
Unfortunately, some owners tend to commit grave mistakes when renting out their properties. If you want to ensure that your tenants are satisfied with you, here are five common mistakes you must avoid:
1. You don’t screen for quality tenants
A property occupancy is a big no-no for a property owner, which means a halt in the rental income, which is why owners want to ensure their properties are occupied at all times. The problem starts when you accept any random tenants without proper screening. You’ll eventually have to handle various issues in the future, and the last thing you want to deal with is a delinquent payer. For this reason, be sure to screen for quality tenants who’ll stay in your property for good and won’t give you headaches.
2. You don’t cover all property-related costs
As a property owner, you don’t expect your tenant to handle all property-related costs, as their obligation is only to pay the rent on a monthly basis. On the other hand, it is your responsibility and obligation to deal with all related charges. For instance, if your rental property is still under a mortgage, be sure to settle the monthly contractual payment (MCP) and pay for the escrowed account, whether tax or insurance.
3. You don’t properly handle the security deposit
It’s vital to be well-acquainted with your state laws, as far as a security deposit is concerned. Sure, you may be asking for a certain amount of money at the beginning of the occupancy; however, you have to ensure that this amount remains compliant with the legalities. Be sure that you approach this properly to avoid any complications. When the contract terminates, keep in mind that your tenant may be entitled to get this deposit back.
4. You don’t get the right insurance
Failing to arrange the right insurance policy is one grave mistake that homeowners can easily commit. For instance, your homeowner’s coverage will definitely not cover your tenant, which is why you may want to consider purchasing a landlord’s policy. That way, you will be financially protected and covered for any damages caused by your tenant.
5. You don’t put everything in writing
It can be easy for you to get into legal trouble if you don’t put all agreements in writing. The first thing to ensure is setting a contract in place where both parties have signed and understood the terms. All arrangements and actions to be taken should be in accordance with what the contract stipulates so that both parties can avoid any legal implications.
At this point, you now know what mistakes to avoid when renting out a property. To that end, be sure to screen for quality tenants, cover all property-related costs, handle the security deposit properly, get the right insurance, and put everything in writing. If all these are quite tedious to handle by yourself, it’s best to hire a property manager to deal with all these crucial aspects of your rental property.
We’re the best property management company in Jacksonville, FL, offering various services that cater to all types of commercial and residential properties. If you’re looking for a property manager to buy, sell, or rent a property, get in touch with us today to see how we can help!