Owning a property is hard enough, but it’s even harder when you own a rental property. When problems arise, they can syphon much of your time and even put your investment in jeopardy if they aren’t handled properly or prevented early.
If you’re a property owner who wants to make sure you get the most out of your investment without having to deal with rental property nightmares, take a look at some of the things you can do to avoid them:
Terrible Tenants
There’s nothing worse than having to deal with terrible tenants, and at the top of the list of bad tenants are those who don’t pay their rent on time. This is not only irritating and time-consuming to deal with, it also strains your investment profit. This can be especially frustrating you’re relying on this income to pay your own bills.
But terrible tenants can take many other forms as well, from hoarders that collect excess junk to party animals that completely trash the place—the list goes on and on. Each type of bad tenant can take a huge toll on your investment because you have to spend more money looking after the property because your tenants don’t.
Tenants who cause damage to rental properties are actually so common that a lot of sneaky investors often look to purchase damaged properties that are rented out by novice property owners. These landlords are forced to sell their properties to these investors for a lower price than they hoped because they simply didn’t know how to manage their properties.
How to Avoid Them:
So how can avoid taking a big hit on your investment with bad renters? Mainly, work on improving your tenant screening process. Create an application where you can look at tenants, analyze their financial situation, run a credit check, and determine who the most reliable tenants will be. Also, develop a lease that protects you if they don’t pay rent or end up damaging your property. This way, you’re covered, and your screening process means you’ll likely get more reliable and trustworthy tenants anyway.
Subtle Legal Obligations/Consequences
Lawsuits can be tough to avoid when you’re a landlord, especially if you’re not familiar with the process of developing a legal lease and all the jargon that comes with it. Even if you don’t intentionally misstep on your obligations as a landlord, the laws are very protective over tenants and will likely get you into trouble.
Renters can file lawsuits over seemingly insignificant things, meaning landlords can easily fall outside of their legal rights by not doing something as simple as immediately repairing a washing machine. Legal obligations are even harder to deal with when you’re a novice. If this is the first rental property you’ve ever owned, then you’ll want to take our tip about how to avoid legal issues revolving around property ownership.
How to Avoid Them:
To avoid legal violations as a landlord, make sure you create excellent relationships with your tenants. Going back to our first tip, this is much easier to do when you have a good screening process and thereby more reliable tenants.
Make it clear to your renters that you are aware of both of your contractual obligations and that you’re happy to help with any issues they might have. This way, you can address problems before they turn into full-scale lawsuits.
Of course, this means you’ll have to brush up on your legal lingo and really understand the ins and outs of the binding obligations of your lease. Otherwise, and if you want the most secure protection against lawsuits, think about hiring a lawyer who can consult you regarding your and your renters’ rights. Consulting a lawyer before you even rent out the property can be especially helpful as you develop an adequate lease agreement.
Major Property Issues
It’s surprisingly common for investors to buy a rental property only to soon discover a host of major property issues after the purchase. When you initially looked around, things probably seemed to be in perfect working over. But, after a few months, you may realize that there are lots of issues that require costly repairs. Some of the most common issues include the following:
- Leaks in the roof/walls
- Rat or other pest infestations
- Faulty drainage system
- Structural damage
- Issues with the central heating
- Dampness/mold
Often, these things aren’t easily diagnosed upon first look. For example, you might have bought the home during a dry spell, so no leaks were detected in the roof. Regardless, these issues are real rental property nightmares as they tend to tend to cost a lot of money to repair. Not only that, you’ll also have to wait until these issues are repaired to allow tenants to move in (unless you want to face a lawsuit, as mentioned before), which will cost you your investment profits for several months.
How to Avoid Them:
To avoid property issues altogether, it’s best to take maximum care before purchasing the property to ensure everything is up to code. Don’t hesitate to invest a little extra to get a thorough professional home inspection done—it can save you thousands of dollars in the long run. Professional inspectors have the know-how and equipment necessary to detect any of these issues, even if there are only subtle symptoms of them, allowing you to reconsider before you purchase the property.
After you’ve purchased a home that has been well-inspected, conduct regular maintenance on it. Ensure that your lease protects you in the event that a tenant causes a property issue or does not notify you of it. As you perform regular upkeep on your property, you’ll be able to prevent issues down the road from cropping up.
Out-Of-State Property Management Difficulties
Living in a different state than your property can throw a wrench in a variety of necessary management activities. It’s near impossible to handle everything related to your property because you can’t physically be there. You can’t see any damages for yourself, you can’t speak directly to tenants face-to-face, and you may even have to work around inconvenient time differences.
Furthermore, some states have different laws surrounding property taxes and real estate than others. So your responsibility is to learn and fully understand those laws while attempting to manage your tenants from afar. It can all be a little too much to handle, especially if you own multiple rental properties.
How to Avoid Them:
To save yourself a lot of time and money, out-of-state property owners should really consider hiring a local property management company in the area to handle the rental for you. That way, you can rest assured that your property is being maintained and your rental agreement is being upheld according to local laws.
In fact, hiring a property management company is a great solution for most property owners, not just those who live out-of-state. From the tenant screening process to evictions, property management companies handle your rental property completely for you. This means you don’t have to waste your valuable time and money learning about how to develop a lease, trying to stay within your legal bounds, hounding late payers, or repairing property issues as they arise.
Ultimately, hiring a property management company is the easiest and safest route to take—not only to guarantee that you avoid these rental property nightmares, but to ensure you get the most out of your investment and maintain peace of mind.
