Top 6 Common Landlording Errors
Landlords have lots of roles and responsibilities, and it can be hard to do them all well, especially for new or inexperienced Landlords. At ezLandlordForms, we have a team of experienced Landlords and have gotten to work with thousands of seasoned Landlords over the last 15 years, many of whom have learned lessons the hard way – by making mistakes. To help you avoid making common mistakes and having to deal with the headaches and expenses associated with them, here are some of the most common landlording errors and tips for avoiding them.
1. Not Properly Screening Applicants
Tenant screening is one of the most important things that Landlords do, but unfortunately not having an adequate screening process is an all-too-common mistake.
Without this, you’re unable to ensure that you’re selecting a qualified and reliable Applicant. An effective screening process should include:
- an Applicant interview
- a thorough application
- a credit report
- a background report
- reference interviews
While there’s a lot involved in the process, using a good Tenant Screening Package can make it easy to get all the key information in one place and avoid common landlording errors. This is the best way to make sure that you’re properly screening Applicants.
2. Violating the Fair Housing Act
To avoid asking illegal screening questions, Landlords must understand Fair Housing and Anti-Discrimination laws before screening Applicants. According to the Fair Housing Act, it’s unlawful for Landlords to discriminate against renters due to race, color, religion, national origin, sex, familial status, or disability.
While these protected categories apply to all Landlords, some states have additional protected categories. Landlords should be familiar with all applicable laws before screening and must create a process that treats all Applicants the same.
3. Not Having an Adequate Lease
The Lease establishes a contractual relationship between the Landlord and Tenant and outlines all rules, policies, and procedures under which the Tenant rents the property. As a first rule, Landlords must have a thorough Lease in place ANY time they rent a property. This is true even if you’re renting to a friend, family member, or acquaintance.
Unfortunately, even once a Lease is in place, it’s a common source of mistakes, especially for new Landlords. Here are 3 Lease errors to avoid:
- Relying on just a handshake or verbal agreement. The Lease is what will protect you should you have problems with the rental, but it has to be in writing to do that. It will only help you in disputes with a Tenant if all terms are documented. This means you should never rent a property to anyone without first having a written Lease that is signed by both parties.
- Having an incomplete Lease. The goal of the Lease is to address all rules and regulations surrounding the property and to leave no doubt about who does what. An incomplete Lease doesn’t serve this purpose and leads to confusion and conflict.
- Having a Lease that doesn’t comply with state laws. If your Lease doesn’t comply with state laws, it won’t protect you when you have your day in court. The tricky thing about Leases is that they have to comply with the unique laws of the state where the rental property is located. To ensure that your Lease is enforceable and doesn’t violate any state laws, it’s paramount that you have a state-specific Lease.
4. Neglecting Tenants or the Property
Once a Tenant is in place, it’s important that you not forget about them or the property. As a baseline, Landlords are responsible for making sure that all rental properties meet basic health and safety standards. Beyond this, it’s important to timely respond to a Tenant’s requests, stay up to date on the property’s condition, complete preventative maintenance, and stay on top of ongoing maintenance needs. It’s also a good idea to regularly check in with Tenants and have an open conversation about any concerns about the property or its maintenance.
Communication is key, not only to identify any areas that need attention but also as you’re completing maintenance. This means that it’s also important to regularly update Tenants on the progress of any repairs or projects.
The reality is that avoiding maintenance generally results in a small maintenance issue turning into a big one. Plus, neglecting a property can lead to increased Tenant turnover, increased vacancies, reduced income, and a heightened risk of Tenant complaints and lawsuits.
5. Allowing Tenants to Violate the Lease
Dealing with conflicts with a Tenant can be hard for Landlords. Because of this, too many Landlords allow Tenants to violate the Lease without any penalties. This is a bad habit to get into and can lead to a variety of problems.
All of the rules and policies in your Lease are there for a reason, so it’s important that you enforce them. And, if a Tenant doesn’t follow a rule and you don’t do anything, it sends the message that you don’t care about the terms of the Lease or, worse, about how the property is treated.
Avoid this by setting the standards you want with your Lease and then always enforcing them.
6. Not Keeping Adequate Records
It’s important to treat your role as a Landlord as a business and to keep thorough records, especially when it comes to property-related expenses and Tenant communications.
Effectively tracking expenses is important for tax purposes, to ensure adequate cash flow, and to properly price your rental property to get an adequate return on investment.
Keeping track of all Tenant communications is important should any issues arise. Having documentation of emails, texts, phone calls, and notices sent to Tenants will ensure that you’re protected if there is a dispute with Tenants.
Be a Pro Landlord
Whether you’re a new or experienced Landlord it is easy to get caught in some of the common landlording errors but, we have all the resources, forms, and tools you need. Visit ezLandlordforms.com and let us make it easy for you to be a great Landlord.