Mistakes Landlords Constantly Make
To enter the landlord business, many are going to have their reasons. Some become “accidental landlords” they could decided to rent out your soon to be former residence, or could of gained the property through inheritance. Or, even choosing to be savvy and purchase one or more, possibly as extra source of income. Whatever the reason, becoming a landlord can an endeavor that could turn a profit, or on the flip side, a costly one.
10 of the Most Common Mistakes For Not Hiring A Los Angeles Property Management Company
1. Not Paying Attention To The Local Market
By now everyone should know the most common term when it comes to investing in real estate, location, location, location. First, it means assuring the rental is in an area that fancies numerous tenants. Even if the price is right, it doesn’t necessarily mean that the location is. Get to know the neighborhood, including transportation accessibility, grocery stores, featured city areas and businesses. Second, definitely understand your location, this means learning how the local market fluctuates, research area taxes and deciding what the rent charge should be. All of the above is key to estimating the return on investment for the property.
2. Fair Housing Laws And Not Understanding Them
Los Angeles Property Management companies know that before even looking for tenants, understanding fair housing and discrimination laws is important, you could risk legal troubles. Fair housing laws are federal statutes ensuring equal access to housing for all. It is very much illegal to discriminate against anyone on the sole basis of race, sex, color, familial status, religion, national origin and/or disability. Other local and state governments have added protections that you’ll have to become familiar with. Generally, you want to focus on the property and amenities that are being advertised and also conversations. Never be biased, you never know who the ideal renter could be. At the end of the day, communicate with every applicant and treat the renter the same way you’d like to be treated, very simple.
3. Not Able To Put Your Best Marketing Foot Forward
Though advertising a rental property may not be as hot as advertising a new car, they do have their similarities. Even the best product ads feature high quality photos, to attract potential renters you’d do the same, and the more, the better. Although a high expense, having professional photos taken could help with a vacancy. Get it in writing, an accurate and error free description of the property with its amenities. Consider posting your property for free online, that’ll allow a reach for a wider audience.
4. Improper Tenant Screening
As in Los Angeles Property Management, speed is a factor when filling in your vacancy, choose a highly qualified renter should be a priority. A documented process and criteria for finding, screening and securing a tenant should be created. Each potential renter should fill out an application and verify everything from employment to past addresses, and if able get a landlord reference. Next, you’ll want to perform a tenant background check and run a tenant credit report. Make sure to confirm that the applicant has paid the rent on time and also not caused problems in the past for previous landlords or employers.
5. Incomplete Leasing Paperwork
A Los Angeles Property Management Company knows that a lease will serve as a binding legal agreement between yourself and the tenant. Making sure it thoroughly addresses the rules, policies, and conflict resolution procedures for living on the property, It should clearly define tenant and landlord responsibilities. Always remember to put everything in writing. A handshake or verbal agreement will not be enough to build a case and go to court. Many generic leases are available online, make sure to review the lease requirements specific to your state or municipality and integrate them into the rental agreement. It would be a good idea to have it examined by a legal professional, this way it ensures the terms that protect your interests and comply with local and state regulations.
6. Unknowing Landlord Responsibilities When Avoiding To Use A Los Angeles Property Management Company
To secure a tenant is a huge milestone. But, the work isn’t over yet. Being a landlord, means meeting terms of the lease agreement. This means to check in with your tenants, this helps you keep tabs on the condition of the property, completing regular preventative maintenance and seasonal maintenance is a must, and responding fast to requests will help build good rapport. A daily task should always be to make sure the property is healthy and safe to live in. Always keeping up on taxes and financial reporting. Neglecting a resident could result in a higher turnover rate, more vacancies, which could mean a lower cash flow or even lawsuits.
7. Anticipation Of Maintenance Costs When Not Using A Los Angeles Property Management Company
Preparing for the possibility that your property won’t always be occupied is unforeseen sometimes. If it has been difficult to fill a vacancy, having enough cash set aside to pay for the mortgage, utilities and other maintenance costs is something to take into consideration, of course if you’d like to keep the business going that is. Maintaining a rental property comes with surprise expenses, this could mean damages and unexpected repairs, the bills still need to be paid. A cash flow analysis would be a good idea also, put a budget in place so if these potential costs need to be covered you’re able, track your expenses to ensure you’re staying in the positive.
8. When To Hire A Professional Los Angeles Property Management Company
If you’re local, are pretty handy around the house and are able to quickly respond to requests, you could maybe keep up with some of the general maintenance and management of the property. Although, if you own several properties or balance some investments on top of a full time job, it’s recommended to enlist the services of a Los Angeles Property Management Company. This also depends on experience and the condition the tenant left the rental, you should hire a contractor to make significant improvements and repairs.
9. Not Able To Manage Time Efficiently
Los Angeles Property Management Companies know for many landlords, to manage even one property alone can be a fulltime job. Not only to secure a tenant and keeping up the books, but understanding that any investment property is going to be a large commitment. Even if you love what you do, do make sure to take time for yourself and create a list of reliable people for backup. To have a network of people that can help in a pinch is important for not only the maintenance but the safety of your property.
10. Unable To Treat The Rental Like A Business
Los Angeles Property Management Companies understand that however you got into landlording, that rental property is a business and that is how it needs to get treated. Take into consideration to set up a Limited Liability Company (LLC) for ownership. This helps protect you personally from any legal action or claim. Do consider using accounting software or a spreadsheet to keep close track of income, expenses and ultimately any return on investment. Always document all procedures and communications with applicants and tenants. When renting a property, you will hear a variety of stories, and sometimes they could be sad. There are plenty of opportunities to help your community, but make sure to have good business sense when making decisions.
To be a successful landlord, leverage skills will help for succeeding. Customer service, marketing, accounting and home repair, are amongst others. Reducing the risks that comes with being a landlord by educating yourself and networking with other experienced landlords and other related professionals. Join local or national landlord associations, this allows you to keep up with changing rules and regulations, and even being able to share experiences, this helps to avoid the most common landlord mistakes.
For the latest in Los Angeles real estate and Los Angeles property management news, trends and tools, make sure to stay connected with our blog at: http://tgnpropertymanagement.com/blog/