Top 5 Mistakes Property Owners Make When Leasing Apartments
The housing market is heating up, with demand outpacing supply and prices climbing. That also means that this is a good time for rental properties; after all, those priced out of buying their dream home still need to live somewhere, so they’re turning to a realtor in Rockford, IL to tide them over. That presents a great opportunity for landlords, but beware: those opportunities can turn to misery if you don’t know what you’re doing. Based on our experience providing property management in Rockford IL, here are our top five suggestions.
Failure to Market
Even when the market is hot, you can’t simply assume that a property will sell itself. You need to advertise, and you need to do it right. Taking plenty of photos inside and out is a good start, but so is putting yourself in a renter’s frame of mind so you can understand the features and amenities they most desire. That, in turn, helps you attract the kinds of tenants you want, at a price that makes it worth your while and theirs.
Failure to Screen Tenants
If you’ve got your marketing right, your phone may well begin ringing off the hook. Now comes the hard part: sifting through a pile of applicants to find the most qualified tenants. Careful tenant screening is the backbone of what we do at Superior Realtors and Rental Properties, and it’s one thing that many inexperienced property owners get wrong, or begin to slack off on as time passes. Your gut feeling about someone isn’t enough. Checking prospective renters’ credit, employment and income, background, and rental history is vital.
Not Understanding the Fine Print
Speaking of gut feelings, there’s something else that can cause serious headaches (or worse): not having ironclad lease agreements and contracts. And once you have those in place, your work still isn’t over, since inconsistent enforcement of lease and rental agreements is itself a common mistake. You either have a no-pet policy or you don’t; you allow a few days’ grace on late rental payments for all of your tenants or none of them. If your conduct is, or can simply be viewed as, arbitrary, you’re simultaneously angering tenants, leaving yourself exposed to potential liability, and making evictions much harder if they become necessary.
Refusing to Get Help
We see this often, especially with newer owners and those first exploring investment properties in Rockford
. You look at the expense of running a rental property, and you decide to cut costs. Perhaps you decide to try your hand at plumbing and electrical. Maybe you figure it’s best to save on lawyers and accountants by drafting your paperwork and doing your bookkeeping. Upkeep? Well, what’s a little painting and mowing in your free time?
But time is money, too, so the time you put into your rental property isn’t “free.” What’s more, when cut costs lead to cut corners, a botched DIY repair effectively costs you twice as much—or more—for the parts and labor. This is an investment property, so invest in it with effective property management.
Treating Your Business as a Hobby
We understand the lure of operating a rental property. If you’re inexperienced, it can seem like an easy source of supplemental income. But you’ll shortly find out that this isn’t the case, and treating it like a hobby or side hustle is a shortcut to failure. This takes many forms:
- Failing to take out appropriate insurance, including property insurance and liability coverage
- Performing repairs when you get around to it
- Not paying attention to the multitude of tax and legal issues
- Asking questions of prospective or current tenants that are unethical or illegal
- Being an absentee landlord
- Failing to be a good neighbor, whether you live on-site or not
- Assuming the housing market will always be as it is now and that your property will practically rent itself
Property Management in Rockford, IL
Our many years in business have allowed Superior Realtors and Rental Properties
to assist countless property owners in the Rockville area. We can help you navigate the many regulations and pitfalls so that you can enjoy property ownership for the rewarding experience it can, and should, be. Call us today!