5 Most Common Mistakes the Landlords Should Avoid

It is inevitable that landlords make mistakes, especially when they’re new to the industry. Renting out properties may bring in what’s regarded as ‘passive’ income, but the day-to-day management of properties is certainly not passive. Landlords have many tasks they need to handle if they want to operate a successful business. Here are some common mistakes they need to avoid. 


1. Not verifying tenants


Landlords need to make informed decisions about who they will accept as tenants. To do this, they need to have a consistent, thorough screening process in place. All prospective tenants should fill out an application form with the information landlords need to evaluate them. With a proper screening process in place, landlords can reduce the risks of late payments, non-payments, property damage and having to evict tenants. 


An ideal tenant should have enough income to pay rent, even when unexpected expenses arise. Calculating the rent-to-income ratio can help to determine this. A high credit score shows a positive financial history of making payments on time. Landlords should ask for and check references from previous landlords. 


Property management services can take the burden of finding the right tenants off the hands of landlords. Evernest, Mynd and 8Z Rentals offer solutions in rental and property management in Boulder. Their screening processes ensure that only the best tenants end up in a home. 


2. Not carrying out regular inspections


Once landlords have screened tenants and see them settled into the property, they may think their work is done. They can just sit back and wait for that rent check to come in every month. The truth is that they need to keep a close eye on their investments. Routine inspections are necessary to check for any signs of damage and to keep up with maintenance. Not addressing maintenance issues can lead to much more extensive costs down the road. 


Tenants may fail to report maintenance issues because they don’t want the inconvenience of having workmen around. If they know repairs will be done quickly at the least inconvenience to them, they are more likely to report an issue. When they report issues like leaking faucets or electrical issues, they may prevent serious future problems, like flooding or fires. 


Property management services help to maintain properties for landlords and will deal with tenant complaints and conduct annual maintenance inspections. They usually work with maintenance teams that offer quality service and take the convenience of tenants into account. 


3. Treating tenants like friends


Many landlords make the mistake of becoming too friendly with tenants. Those that sympathize with tenants and their problems find it very hard to stay objective. They need to keep the relationship friendly and courteous but professional in order to enforce the terms of a lease. They can’t worry that tenants won’t renew their leases if they are too strict. 


Some of the terms they may need to enforce are restrictions on pets or adding fees to late rent payments. Being too sympathetic will interfere with their business goals, especially when it comes to collecting rent on time. One month of not paying the rent can quickly turn into two, which means a loss of income before even thinking about starting a costly eviction process. 


4. Ignoring move-in and move-out inspections


Another mistake landlords can easily avoid is not doing proper joint move-in and move-out inspections. It is important to document the condition of a property before tenants move in, or it is difficult to prove that they were responsible for any damage after moving out. Every damaged item or scratch on a floor should be noted, along with photographs and kept in the tenant file. If the landlord agrees to do any repair work, a list should be attached to the lease agreement as an annexure. 


Without these inspections, tenants may feel they are liable for damages they didn’t do, or landlords may feel they have to pay money for repair work that should be the tenant’s responsibility. The Rental Housing Act regulates that inspections are conducted and how they need to be done. Deposits paid by tenants are usually quite a significant amount, and landlords can set off any damage incurred by tenants against it and return the balance. Conducting proper move-in and move-out inspections ensures each party carries the proper liability. 


5. Ignoring tenant’s rights


Landlords need to comply with various federal, state and local laws regarding tenant rights. For example, they need to comply with the Fair Housing Act, which means they can’t discriminate against potential tenants for their race, religion, sex, nationality or disability. 


Landlords have to abide by various protocols that cover issues such as rent collection and the proper way to handle a security deposit. They also have to respect the privacy of their tenants and can’t just walk into a rental property at any time and unannounced. Landlords must also follow the legal procedures for evictions.