Below is a continuation of the previous article Common Landlord Mistakes to Avoid — Part 1
You don’t understand your responsibilities as a Landlord.
After so many prospects, you were able to secure a tenant. This is just the beginning! As a landlord you need to meet the terms of the leasing agreement; contact the tenants, proper maintenance of the property, keep up with certain maintenance (smoke detectors, HVAC, plumbing, pool, etc.), and correct any concerns the tenants may have. You must maintain records of all items as well as pay for insurances and taxes. If you’re not ready for the responsibilities and you neglect the tenant and property, get ready for higher cost of turnovers, vacancies, less income, and possible lawsuits.
You don’t understand maintenance cost
Get ready for the possibility of having to pay carrying cost (Mortgage, utilities, maintenance) out of your own pocket. This can happen if you cannot fill a vacancy fast. Do you have enough cash tucked away somewhere? Being the landlord of a rental property comes with unexpected expenses and you need to prepare for it with time. It’s important to complete a cash flow analysis and establish budgets to cover unforeseen costs and make sure to track your expenses to ensure you are staying on the positive side.
You don’t understand when to hire a Professional
Being a local investor has their advantages especially attending service calls or tenant complaints. If your handy this can save you a couple of bucks and in return maximize your rental income. However, if you own several properties handling all aspects of the property is definitely a full time job. Hiring the right management company can facilitate the hard work and still bring you a great rental income stress free. Miami Property Management can tackle any complaints big or small and will give you solid advice when it comes to repairs on your property(s).
You don’t understand managing your time efficiently
For the uninitiated managing one rental property can be a hand full. Between finding the right tenant, maintaining the property, managing financial records, and complete all the responsibilities it becomes a massive time commitment. In today’s world time is money and if you do not have to time to spare find the company that can. In the long run, you will build a strong relationship with your manager and it will allow you time to find the next investment property. Having a group of people backing you up is important for the safety and maintenance of the rental property.
You don’t understand how to treat your rental property like a business
Any way you look at it your rental property is a business. Treat it that way! In every business, there is liability consider setting up an LLC (Limited Liability Company) as the owner of the property. This tool can help you in protection over claims or legal action. It is extremely important to keep records in an accounting software or spread sheet. Document everything. Keep records of every rental payment, work orders, warranties, insurances, etc., and put it all together in one place. Follow a procedure until it becomes automatic. As they say a well-oiled machine will run smoothly.
Anyone can be a landlord but a successful landlord is key. This takes time and discipline over many years. If you fall into any of these common mistakes consider hiring the professionals. Yes, we charge a fee but keep in mind everything that it entails. You can rest assured that your property is managed professionally to your standard. If you’re on the fence and want to tackle land lording on your own, feel free to contact Miami Property Management LLC with any questions, we are at your service. Good Luck.