Making mistakes with your Atlanta rental property is easier than you realize.
Whether you’re a new landlord renting out the home you once lived in or an experienced investor with an entire portfolio; mistakes can cost you time, money, and security. Managing a rental property involves more than tenant placement and rent collection. You have to be vigilant and organized, and you have to document everything.
If you want to have a good experience with your Atlanta investment home, make sure you do everything you can to avoid these common landlord errors.
First Mistake: Not Knowing the Atlanta Market
If you don’t know the Atlanta market, you’ll make a lot of mistakes.
Some of the mistakes will include:
- Pricing your property incorrectly.
- Marketing and advertising in the wrong places.
- Making upgrades and improvements that don’t make sense.
- Raising the rent at the wrong time.
The amount of rent you can charge starts with the market. The length of time your property is vacant will depend on the strength of the market. You have to be able to identify trends and manage your property accordingly.
If you don’t know the market, you won’t know what tenants are looking for and what they’ll be willing to pay for. Maybe updated amenities are required, and maybe there are HOAs where you cannot rent out a property to a tenant. It’s critical that you get to know the Atlanta rental market and stay informed about its changes.
Missed Marketing Opportunities
Marketing your rental property requires that you have a good property to present. Before you list it, make sure it’s in move-in ready condition. Many landlords are in too much of a rush and they start showing their property before it’s ready.
Once your home is clean and everything is working, you can begin marketing and advertising. The biggest mistake you can make here is not advertising online and not taking good photographs. It’s important to take this seriously. Your pictures will be the first thing that prospective tenants look at. They’ll want to get a good idea of what your property looks like. A video is a great idea, too.
Most tenants won’t bother looking at a listing that doesn’t include photos. Make sure you provide a lot of them. Create a camera-ready property, and then get photos of all the great things you want to show off about you rental home. Set a beautiful scene. Work with good, natural lighting, and use a wide angle lens so you can maximize the space and size of every room. While you don’t need professional photography equipment, use a good camera. The one on your phone may not do a great job.
Prospective tenants will want to see a listing that includes pictures of the outside, the yard space (if there is any), the master bedroom, the bathrooms, the kitchen, and the living room. If the bathroom has a garden tub, include a picture of that. Show off fireplaces, walk-in closets, garages, and large, fenced yards.
Write a description that matches your photos. Don’t make the mistake of leaving out pertinent information. Your ad should state how much rent is, whether you allow pets, and how many bedrooms and bathrooms the property has. Make sure you include your contact information.
Online advertising is the most effective way to reach a wide pool of tenants. Some landlords simply run a listing on Craigslist or put up a sign. Craigslist is full of scams. While it can be a useful site, be careful that someone isn’t stealing your information and claiming the property is their own.
There is still a place for professional, easy-to-read signage in Atlanta, but to really reach large numbers of potential tenants, you need to post online on the most popular rental sites. Try HotPads, Zillow, Rentals.com, and Trulia or Realtor.com.
Insufficient Screening of Atlanta Tenants
Tenant screening is where many landlord mistakes are made. Owners don’t screen at all or they glance at a credit report and think they’re done. You need to dig a little deeper. Conduct criminal background checks, run a nationwide eviction check, and check their financials thoroughly. Talk to references, especially landlord references.
It’s also important to have a written screening process in place. This allows you to provide tenants with your rental criteria before they apply. When you don’t have written criteria in place, you put yourself at risk for screening applicants differently. That can be a fair housing problem. You need standards that every applicant must meet in order to be approved for your property. Put those standards in writing. They might include a minimum credit score, a certain income, and a positive reference from a former landlord.
Red flags include prior evictions and money owed to former landlords and property managers. Checking credit is important, but don’t expect a perfect credit score. Instead, make sure there are no outstanding judgments or money owed to landlords or utility companies. Verify employment and income. It’s a mistake to assume every applicant is telling the truth on every application. Make sure everything checks out.
It’s a major mistake not to contact current and former landlords. This is your best source of information about the tenant. You can ask if they paid rent on time, took care of the property, had any pets, left behind any damage, and gave proper notice. Do a little digging to make sure you’re actually talking to a landlord, and not a family member or a friend.
Postponing Rental Property Maintenance
Every property will eventually need maintenance, no matter how new it is or how recently it was renovated. Your Atlanta investment home will have something break or deteriorate, and you have to be prepared to respond to the problem. Ignoring small problems is a huge mistake that a lot of landlords make because they don’t want to incur the expense of fixing it. Deferred maintenance will actually cost you more in the long term.
When a tenant submits a maintenance request, evaluate it immediately and respond as soon as you can. Slow response times only frustrate your tenants and give them a reason not to renew the lease. Be responsive, especially when it comes to emergencies.
Work with licensed, insured, and bonded vendors and contractors who have workers’ compensation insurance. If you hire an unlicensed handyman without insurance and he falls off a ladder, you’re going to be liable for his medical bills. Seek out affordable, reliable vendors in Atlanta who can do a good job.
Preventative maintenance not only keeps your tenants happy, it also preserves the condition of your home. If there’s a small leak, fix it right away. If you don’t, you’ll only end up with a larger and more expensive problem. Have your HVAC system serviced every year. This will extend the life of the system and give an expert technician the opportunity to make sure it’s running okay. The expense is worth it, and will save you from deferred maintenance costs and headaches.
Another maintenance-related mistake that landlords make is not budgeting for maintenance. If you can save a little of your rent every month in a maintenance reserve account, you won’t be surprised and unprepared when expenses pop up due to maintenance needs. Put together a maintenance budget and track your expenses.
Not Understanding State and Federal Laws
If you don’t know the laws in Atlanta, in Georgia, and in the U.S., it’s going to be impossible for you NOT to make a mistake. Legal trouble is never good news for landlords. Study the Georgia landlord/tenant laws, stay up to date on your local Atlanta regulations, and follow the federal laws and legislation. If you don’t, you could find yourself in legal hot water and facing some pretty heavy fines.
The Fair Housing Act prohibits discrimination against seven protected classes. According to this federal law, as a landlord you are not permitted to deny someone housing based on:
- National Origin
- Familial Status
Most landlords don’t intentionally discriminate. It’s easy to make a fair housing mistake without even trying. The terminology you use when you advertise, the criteria you use when you screen, and the way you enforce your lease can put you at risk. Learn the laws.
Not Working with a Property Management Company
Unless you have the time, knowledge, and resources, working with a professional is the best way to earn more and spend less. You can benefit from a professional Atlanta property manager, and save yourself from all of these costly mistakes.
We talk to a lot of landlords who want to manage on their own because they think they’ll save money on management fees. That may be true, but you have to think about the real cost of not having a professional property manager. Higher vacancy rates, terrible tenants, late rent, potential evictions, legal trouble. There’s a lot that can go wrong. With a professional manager, you’re protected. So are your property and your bottom line.
Remember, your rental property is a business. You have to treat it as such. It’s easy to take things personally and to develop an emotional connection to the property. But, you have to consider every situation from a business standpoint and make decisions that will be best for your investment. An Atlanta property manager can help you do that.
If you’d like more information or you have any questions, please contact us at Specialized Property Management Atlanta.