It can be easy to make mistakes when you start a new venture, especially with real estate investments. You must be careful, act professionally, stay informed, and pay attention to these easy to avoid mistakes.
1. Assuming the property will always be rented. You have to remember that there will be some down time between tenants to ensure it will be move-in ready for the next tenants. It is wise to have one to two months, minimum, in savings in anticipation of the unit being vacant. It takes work and some time to get the property back in rental condition and then actually finding a qualified tenant. Don’t make a bigger mistake of grabbing the first tenant that shows some interest... That leads us to a second mistake.
2. Failing to properly screen applicants. When the property has been vacant for a few weeks and you aren’t earning the rent money it is easy to get lax and panic then approve the first tenant that fills out an application. It is easy to pass on the need for credit and background checks until you realize the tenant stops paying the rent and now you are faced with an expensive eviction and more lost rent. Doing a background and credit check can weed out the non-payers with much less hassle then an eviction. At Premier Realtors of Columbus, we conduct an extensive screening. We will look into their income/debt ratio, history of late payments/evictions/criminal background.
3. After all, this is a business, not a hobby. You have a mortgage, insurance, repairs and taxes to pay at the least. So remember it is a business. Don’t get mixed up in the personal drama of the tenant by accepting lame excuses for lack of rent payments. Be professional and expect the rent to be paid, in full and on time or start the eviction. With some instances, Covid-19 for example, there may be a certain hardship your tenant is experiencing that you may feel inclined to help them out, just try not to make this a normal occurrence.
4. Don’t delay an eviction. This is another place that treating the tenant professionally and as a business is important. Don’t hesitate to send a 5-Day Notice warning the tenant that he/she has five days to pay the rent in full or move-out of the property. Failure to pay or move out will result in an eviction proceeding. Promises by the tenants to pay up ‘next week’ can prove to just be a delaying tactic. Premier Realtors of Columbus will even handle the entire eviction process for you, including going to court to fight for you as the property owner if it comes down to it!
5. Understand that repairs are inevitable. Items in the home will wear out and stop working. This will run into costs associated with materials and labor. Set aside one to two months’ rent to cover the costs of those repairs. We maintain a group of about 3-4 different contractors for our repairs & are more than open to getting you multiple estimates to get the best bang for your buck! Some minor repair requests can simply be noted down on the tenants file, so that they don't have to be responsible when they move out, if it is something you don't believe it necessary to immediately remedy. Premier Realtors uses a 24/7 emergency maintenance line for any emergencies that occur after hours, over weekends, and on holidays!
6. Get a well written lease that protects both you and the tenant. Be careful of leases found on line as they may not comply with your state laws. If possible check with a real estate attorney who may be able to supply a legal document. Premier Realtors of Columbus Property Management uses the most up-to-date official lease agreement forms to provide the highest level of protection for our property owners. We make a great effort to clarify each section of the lease with all new tenants, so that we are all on the same page from day one!
Starting off managing your own investment rental properties can seem quite simple at first, but once you actual begin marketing the property, screening applicants, collecting rent, all while keeping them happy and wanting to stay can be a major headache for most owners. Premier Realtors of Columbus Property Management is here for you to take away that headache and ensure you get paid in a timely manner each month so that you have more time to focus on the other things going on in your busy life!
Give us a call today to learn more about our services and how we can be of assistance to you!