Common Ways First-Time Rental Property Owners Mess Things Up

Just because rental properties can be highly profitable investments doesn’t mean that every landlord is able to properly capitalize on them. Without even meaning to, many first-time property owners engage in behaviours that severely limit their ability to generate rental income. Considering how much capital goes into purchasing and maintaining the average rental property, this is far from an enviable position to be in. Fledgling landlords looking to maximize profitability should make an effort to avoid the following missteps.

Devoting Little Attention to Maintenance

If you habitually regard property maintenance as an afterthought, you may be paving the way for a plethora of undesirable consequences. For starters, a lackadaisical approach to maintenance is practically guaranteed to draw the ire of your tenants. As the owner, it’s your job to ensure that the property is fully livable, and if you routinely ignore maintenance requests, you’re derelict in your duty. Unsurprisingly, such behaviour is highly conducive to low renter retention and negative online feedback. 

Secondly, placing maintenance issues on the back burner is likely to cost you more time, money and manpower than addressing them in a timely manner. The longer certain issues are left alone, the likelier they are to become bigger – and costlier – problems. Furthermore, if a maintenance issue that compromises a property’s livability is left to linger, tenants may begin withholding rent and potentially even take you to court. 

With all this in mind, make sure to regard every maintenance issue a tenant reports with due importance and see that it’s addressed posthaste. No matter how cumbersome you find dealing with maintenance issues to be, getting assorted repairs and renovations out of the way can lift a tremendous weight off your shoulders and ensure that tenants are able to enjoy problem-free residences.  

Placing No Importance on Tenant Screening 

Tenants who keep up with rent are any rental property’s most valuable resource. In the absence of such tenants, even the most amenity-laden rental property would have a hard time generating income. So, when reviewing rental applications, it’s in your best interest to be as thorough as possible. Depending on where you’re based, evicting a tenant who’s unable or unwilling to pay rent can prove arduous, costly and immensely stressful – and by placing all applicants through a meticulous screening process, you can dramatically diminish your odds of getting stuck with unreliable renters.

When screening potential tenants, there are numerous areas you’ll need to focus on, with income situation, rental history, credit score and criminal background being among the most important. You should also require each applicant to provide references – preferably people outside of their respective families and friend circles, such as employers and previous landlords. Many applicants assume that landlords won’t reach out to references, so by taking the time to make some phone calls, you can effectively thwart the efforts of any applicants who are hoping to pull the wool over your eyes. 

If you find tenant screening to be an exceptionally bothersome process, consider outsourcing it to a trusted property manager or a reliable screening service. This will help ensure that you’re able to weed out potentially problematic tenants without having to expend time and effort that is better directed towards other aspects of property management.   

Failing to Obtain the Proper Registrations and Permits 

Before proceeding to rent out an investment property, you’ll need to obtain any necessary registrations and/or permits. So, in advance of taking on your first tenants, make sure to educate yourself on the requirements you’ll need to meet in order to lease a property. This process tends to be easier in municipalities that utilize cutting-edge rental registration software

Contrary to what it may seem like from the outside looking in, rental properties aren’t always profitable investments. While some properties are able to generate healthy returns on a monthly basis, it’s important for first investors to understand how much work goes into maintaining a successful rental. If you think you can simply sit back and collect rent checks every month, you may be in for a rude awakening upon purchasing your first rental property. However, by taking the time to educate yourself on the ins and outs of rental property ownership, you can set the stage for lasting success and long-term tenant satisfaction.  

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