The dream many real estate investors have is to start investing with one or two properties and slowly build their portfolio until they can live off their rental income. With nearly 30 years as a property management company in Atlanta, we can confirm that this goal is attainable. However, it is important to remember that owning rental property takes time and expertise. Seemingly small mistakes can lead to thousands of dollars in income lost, and your investment can be put at risk. What are these mistakes and how can you steer clear of them? We share the top 10 landlord mistakes, and how to avoid them.
Landlord Mistake #1: Poor Property Selection
The first mistake inexperienced property owners make can happen before you even dip your toes in the water. Poor property selection is a big, and costly, mistake. Some properties are hard to rent out, leading to extended vacancies. Other properties won’t bring in enough rent to cover maintenance or other expenses. When you are searching for the right rental property we recommend looking for the following features:
- At least 1500 square feet and less than 15 years old
- Three bedrooms with a standard layout
- Fenced-in yard
- Washer and dryer hook-ups
- Designated parking area, such as a garage or carport
- Close to public transportation, shopping, and good schools
If you’re having trouble selecting an investment property, talk to the experts at the top property management company in Atlanta. Our Specialized team knows the local Atlanta market and can help you find a great property. For more information on choosing the best rental property, read this post.
Landlord Mistake #2: Extended Vacancies
Buying rental property in a booming market like Atlanta means that you will always be able to rent out your home quickly, right? Wrong. Without proper knowledge of the Atlanta market and efficient advertising, your rental home could sit empty for weeks or months at a time. Without a tenant, you are not bringing in an income. When you factor in mortgage payments, insurance, utilities, maintenance, and advertising you could be paying thousands of dollars to place a new tenant. So how do you find a highly qualified tenant quickly? Start by pricing your property according to the market. Properties priced too high or too low will drive away potential tenants. Next, make sure your property shows up on multiple rental property websites so you can reach the widest pool of applicants. Finally, always respond quickly to requests to schedule a viewing. Tenants don’t want to wait to see a home in which they’re interested.
Landlord Mistake #3: Showing Your Property Too Early
As an experienced property management company in Atlanta, we can confirm that first impressions matter. Often, property owners think they can avoid long vacancies by showing their property when the old tenant is still occupying it, or when the property is under construction. The truth is, showing your property before it is rent ready actually causes longer vacancies. Potential tenants don’t want to see your current tenant’s dirty dishes, or your rental home’s floors being redone. When the home seems half-finished, it is hard for tenants to picture it as their own. And, if you happen upon a tenant who can see beyond the wet paint they will likely move on when they realize they cannot move in immediately. By waiting until your property is rent-ready to put it on the market, you ensure that potential tenants will see it at its best. For more information on getting your rental home rent-ready, read this post.
Landlord Mistake #4: Choosing Unqualified Tenants
Ideally your tenants should have good credit, steady income, great references and rental history, and no evictions on their record. However, not every tenant that applies will have all of those things. As any property management company in Atlanta will tell you, choosing a tenant is more difficult than it seems. For property owners who are worried about the cost of an extended vacancy, picking the first tenant who comes along may seem like a good choice. But, even with the high cost of vacancy days choosing an unqualified tenant can actually cost you more in the long run. You cannot know about every layoff or sick family member, but you can do your part when screening tenants. That is why we put every tenant through a thorough screening to ensure they are the right fit. To learn more about our screening process, read this post.
Landlord Mistake #5: Tense Tenant Interactions
Managing rental property is all about relationships. Maintaining a good relationship with your tenant will lead to less turnover and a better experience overall. However, sometimes this is easier said than done. What happens when your tenant consistently pays rent late? What if your tenant knowingly breaks the terms of the lease by renting out rooms without your permission? These scenarios cause frustration, even to the best property management company in Atlanta. But you cannot simply ignore bad tenant behavior. The keys to good landlord-tenant relations are to remain emotionally unattached to your rental property, be clear in all your communication, and be respectful of your tenant. Remember that homeowners typically take better care of their homes than renters. Always be clear and consistent when enforcing the lease terms so that your tenant knows what to expect.
Landlord Mistake #6: Failing to Answer Maintenance Calls
A happy tenant equals less turnover. How do you keep your tenant happy? One of the most valuable things you can do is to answer promptly to maintenance requests. Whether your tenant has a maintenance emergency or just a simple request, you should respond within 24 hours. Quick response times show your tenant that you care about their well-being. Provide multiple ways for your tenant to contact you, such as an email, phone number, and an online tenant portal to submit requests. Never leave your tenant waiting around, wondering when their property management company in Atlanta will answer their call.
Landlord Mistake #7: Careless Rent Collections
When your tenant signs the lease, it is important to review all rent collection procedures. How is rent collected, when is the due date, and what are the late fees? If you allow electronic payments, such as payments made through a tenant portal, explain to your tenant how this system works. No matter how you collect rent payments, always keep a good record of them. We recommend electronic rent payments to make record-keeping easier.
Landlord Mistake #8: Violating Housing Laws
Do you know each and every federal, state, and local housing law? What about city ordinances or HOA bylaws? If you don’t have a decade of experience in property management, chances are you are at risk of violating a housing law or ordinance. Unfortunately, ignorance of the law is not a defense for breaking it. If you violate a housing law, you could be responsible for paying a steep fine, putting your investment at risk. As an experienced property management company in Atlanta, we are familiar with every law you need to follow so you do not end up paying fines. For more information about how Specialized Property Management protects you from legal issues, read this post.
Landlord Mistake #9: Skipping Property Inspections
How often do you inspect your rental property? Inspections take time and effort, which is why many property owners only inspect when a tenant moves in or out. We have found that skipping regular inspections can actually lead to higher costs. Inspecting your rental property quarterly or biannually gives you a chance to address unreported maintenance or safety problems and lease compliance issues. Regular inspections also signal to your tenant that you care about their well-being and the state of their home. Don’t neglect this important aspect of property management. For a guide to inspecting your rental property, read this post.
Landlord Mistake #10: Neglecting Routine Maintenance
When was the last time your rental home got an AC tune-up or a chimney sweep? If the answer is “I don’t know”, you need to be more proactive about maintenance. Calling in professionals to inspect, clean, and maintain your home’s systems will save you money in the long run. As the top property management company in Atlanta, we recommend scheduling preventative maintenance for your home’s systems at least once a year. Preventative maintenance can give your AC, furnace, and other systems 5-10 more years of life compared to systems that are not maintained well. When you are planning your yearly rental property budget, make sure you set aside at least one month’s rent for routine maintenance, or more if your home is over 15 years old.
Avoid Mistakes With The Top Property Management Company In Atlanta
What is the best way to avoid costly property management mistakes? Work with the top Atlanta property managers, Specialized Property Management Atlanta. Our property management experts reduce costly mistakes and increase your return on investment. We offer a full range of services, covering every aspect of the rental cycle. To put our experienced professionals and proven processes to work for you, contact us today for a management quote. Call 404-596-8454 to learn more.