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?