Top 10 Mistakes New Landlords Make

December 12th, 2011 · 8 Comments · Personal House, Property Management, Rental Property

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Creative Commons License photo credit: Yashna M

There’s a few mistakes that new landlords make before they learn more about the landlording business. Even landlords who have been around for a while make these common errors. They’re easy to make.

1- Underestimate The Difficulty Of The Business

Every single business has it’s problems and pitfalls. It’s not easy to be an entrepreneur. That’s why most new businesses fail. It can be hard, expensive and lonely.

After all how complicated can it be? Buy a house, rent it out, collect money, prosper.

2 – Spend Too Much On Renovations

Landlords have a well deserved reputation for being frugal. They have to be. An experienced landlord does not pay “retail” for renovations. In many cases they’ll do a lot of work themselves, or use lower priced handymen/women or smaller companies.

No one in their right mind pays up front for renovations. They pay quickly when the work is inspected. For some work, there will be a deposit for materials. For the most part, no way!

3 – Fail To Screen Tenants Properly

The best way to deal with a bad tenant is to avoid them by not letting them move into your property. New landlords are not even close to suspicious enough.

4 – Taking Landlord & Personal References

Imagine having a tenant living a free life in your property, it’s been six months since you saw a cent of rent. Your valuable investment is getting trashed… out of the blue a landlord calls you for a reference for your tenant from hell. ¬†What would you do? Landlord references and personal references mean nothing.

5 – Fall In Love With Their Rental Property

Once you rent out a place, you turn over legal possession. It now “belongs” in a very real legal sense to your tenants. Falling in love with your rental property means that you’ll expect your tenants to take care of it like you would yourself. That’s not realistic for the most part.

The minute a tenant doesn’t take care of the place, (common) the landlord reacts very emotionally to the situation because of their attachment to the house.

6 – Underestimate Tenant Drama

One of the most irritating things about being a manager or landlord is tenant drama. It comes in many shapes and sizes from fighting with other tenants, to making mountains out of molehills to threatening you with the Landlord & Tenant Board for “infractions”. It just goes on and on. Tenant drama will drive you crazy if you let it.

7 – Ignorance Of Landlord & Tenant Law

New landlords are often ignorant of the basics of Landlord & Tenant Law. Some don’t even know where to find a simple non payment of rent form. They just don’t know the bare minimum. Don’t make this mistake. Go to the Landlord & Tenant Board and sit there and listen to the cases…it’ll be an education.

8 – Being Too Nice

The time to nip non-payment of rent and tenant drama in the bud is when it starts. Letting the situation slide means that it’ll get worse before it better. By get better I mean evict them. With people who don’t have a lot of money letting them slide, not following up and not emphasizing rent payment as a priority can easily escalate and lead to eviction.

9 – Taking It Out On The New Tenants

So you’ve had a bad tenant, not every tenant is bad. You have to get over it. Most tenants happen to be good guys. Expect your tenants to be human, they’ll slip up on their housekeeping, park in the wrong spot and have bad days and good days. That’s just life. Don’t let bad experiences make you bitter. Every new relationship is exactly that, new with it’s own challenges and joys.

10 – Blaming Themselves Too Much

When problems arise, new landlords blame themselves too much. It’s expensive to learn. “If only I had done this” or “If only I had done that” they tell themselves. They do not understand that there is a whole subsection of tenants who prey on new landlords. These are experienced conmen. Learn and move on, don’t make the same mistake again. Forgive yourself.

Landlords did I miss anything? Any other common mistakes you made as a newbie landlord?

 

 

 

 

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8 Comments so far ↓

  • Mr. Cheap

    I’ve done 6, 8 & 10 myself (and had to keep myself carefully in check with 9).

    I’d also add:

    11: Expanding too quickly. Either buying too large a property or buying multiple properties in quick succession while the new landlord is still learning the ins-and-outs of the business.

    12: Entering bad partnerships: In an effort to make it less scary, partnering with people to “share the responsibility” and instead just adding new partner drama to their life.

    13: Analysis paralysis: The opposite of #1 & #11, some “landlords” learn everything there is to learn about being a landlord, but never actually buy a property. Hoping to deal with the riskiness by learning more, they just learn, and learn, and learn, and learn and never do.

  • Julie

    I have been guilty of all of them and because of that I became gullty of the one I would add ….
    Not realizing when they’re totaly burnt out and it’s time to hire a professional.

  • Suzie

    I did not do anything wrong, but my son played his XBOX and talked very quietly past midnight and the other tenant cursed, slammed something and scared me to death at 4:30am in the morning. Tenant said he was going to sue me cause the other tenant threatened him (but he didn;t),
    then decided to drop the small claims court action. Never received anything of the sueing in writing at all

  • Helen

    14. Not making timely repairs or not repairing at all. Shows the tenant you don’t care therefore why should the tenant.

    15. Multiple room lettings in a property and no ground rules in the payment of utilities. Someone ends up footing the bill for everyone in the property which makes that tenant unhappy and the landlord in a compromised position when it comes to utilities further down the line.

    I’ve been on the receiving end of number 9 and that made for a poor relationship with my landlord. I moved asap because it became unbearable.

  • Charlotte

    My landlord is guilty of 5 and 9, I got regular notes and messages about stuff her old tenant did, I guess as a warning for me not to do it too, even though I already didn’t.

    Makes me so glad that she did not ask me to sign a 1-year lease, and happy I could scrape together first and last for another place within 2 months of moving in.

    (sorry, rant! Dealing with a bad landlord is extremely stressful lol)

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