You buy a property, revamp it and put it out for lease. So you think it is this simple. Truth be told, rental properties require more than this. Any long-time landlord would tell you that there are several other things to consider – from start to finish and most especially, in between.
In the race towards achieving high profit in rental property business, although it is quite common for newbies to commit mistakes, even non-rookies can be thrown off-course sometimes. Being unable to distinguish truth from fallacy, landlords are bound to fail in the business. Of the many existing misconceptions, correcting the more common ones could be a good first-step to take.
Correcting misconceptions should be done sooner and not later. You will be grateful for the risks you are able to avoid if you do so.
Rental Property Misconceptions to Correct
- Policies can be ambiguous
Policies and procedures in tenancy should be followed and stated as clearly as possible. Ambiguity should have no room here. It is best that you seek the assistance of expert property management agents in order to help you fully understand the legal steps you need to follow from the creation of a contract and up to its disclosure to your tenant. Every detail should be clear between you and your tenant, including rental payment schedule, security deposits, maintenance and everything else that may be allowed and not allowed.
- Rental Agreement may be conditionally disregarded
The reason why a rental agreement is made is because you need to abide by it – both you, as landlord and your tenant. If it is your intention to bend some provisions sometimes, then that makes your agreement irrelevant. Disregarding rental agreement could not only get you into legal trouble but also create a habit of ‘violations’ from both your end and your tenant’s.
- There is no need for Tenant Screening
Are you fine with strangers living in your property? Tenants may be that at first but knowing a little bit more about them is a must for any landlord. Becoming familiar with who you allow into your property is a way of warding off possible problems in the future. Landlords are advised to have a tenant screening in order to rule out the possibility that you are taking in a tenant with bad credit record, or worse, with pending legal or criminal cases.
- You can refuse tenants as you will
Once you are able to do a background check for a prospective tenant, do not be discriminating and refuse a tenant based only on his race, color, gender, national origin and even social marital status. Landlords should be reminded that the reason for refusing a tenant should be without discrimination or violation of a tenant’s right to an abode.
- Tenants can pay rent late
Sometimes the leniency of a landlord is also his source of stress. Being too lenient especially when it comes to the financial aspect is a call for tenants to become sloppy and maybe even delinquents in their obligations. Being under an agreement should cause your tenant to be in obedience with payment terms and schedules as you should also be keeping your side of the bargain. If you want a thriving business, run it professionally without emotional biases getting in the way.
- Ensuring that inclusions are in good working order is not really a priority
Should you decide to supply fixtures and inclusions, make sure that they are in good working order. Once they have been installed in the property, it becomes part of a landlord’s responsibility to ensure that they are in a good state. The primary purpose of adding these inclusions are for them to be used by your tenants, and accordingly boost your property’s desirability. If they aren’t working properly, then what is the point?
- Raising the rent should be avoided
With the thought of losing a tenant, most often, landlords are afraid to raise rent. Raising the rent is not an issue so long as you are able to give a justifiable and legal reason or support for your action. Being familiar with the tenancy law would help in your decision-making when it comes to this. As a landlord you are bound to be with additional costs like maintenance and even taxes so if you don’t raise rent when necessary, you are likely to be renting properties at a loss.