Mistakes to Avoid When Managing Your First Rental Property
If you’re looking to get into the Airbnb game, managing a rental property isn’t as simple as achieving a well-designed space travelers want to escape to. Becoming a do-it-yourself landlord comes with a learning curve and the following mistakes you want to avoid making at all costs.
Mistake #1 – Underestimating the Level of Management
Purchasing an excellent property and placing a tenant is only half the battle. The other half is being able to collect rent on time, managing any property repairs and meeting week-to-week tasks that may be difficult to attend to if you’re adhering to a busy schedule. To cover these tasks effectively, you can tap residential property management services while you oversee bigger-picture operations.
Mistake #2 – Incorrectly Pricing Rent
If your pricing is too high, you put your property at risk of sitting vacant for months. If your pricing is too low, you lose healthy profits and attract the wrong types of tenants. You can select the right price range by using comparable properties or enlisting the help of real estate management companies. Consider decreasing your rent by no more than $25 if your property remains vacant for more than a month or two.
Mistake #3 – Foregoing Tenant Screening
As a first-time property renter, finding a tenant is an exciting step towards passive income. However, you can’t forego vetting them simply to reduce vacancies. To ensure your tenants are capable of managing your space and paying rent on time, review their credit history and background to obtain peace of mind.
Mistake #4 – Forgetting to Note Vacant Periods
An occasional lull in the market or need to perform cleaning and repairs in between tenants, you’ll likely experience vacant periods every so often. Before jumping into the rental business, it’s important to account for these periods by developing a financial cushion to cover the mortgage, utilities, and other additional costs.
Mistake #5 – Not Keeping Records
It can be tempting to avoid keeping records of passive income—but treating your rental property as a business of its own can help you avoid legal issues. By keeping records of all your expenses, payments, repairs, you can resolve any problems that may necessitate these items. Additionally, keep track of communications between you and your tenants in the form of email, texts, faxes, and legal documents such as lease agreements and inventory forms.
Mistake #6 – Ignoring Your Tenants
Part of being a reliable landlord is constantly keeping in touch with your tenants. The easier you are to reach, the quicker you can resolve any property-related issues and ensure a positive experience for those renting out your property. The more mutual respect you nurture between both parties, the more you can keep good tenants around for longer.
Venturing into an unfamiliar industry for the first time is bound to harbor the occasional slip-up. Yet knowing what to avoid in the first place can help you set clear expectations for both you and your tenants.
For property management in Jacksonville FL, Quest Real Estate is always ready to help. First-time property renters can focus on reaping the benefits of their new business without having to stress over the day-to-day—we’ll take care of that for you.