REIClub - What Are Some Costly Landlord Mistakes You Should Avoid? Here’s A Quick Video On How To Avoid These Landlording Mistakes... Hi, this is Frank Chen with REIClub, the only site you need as a real estate investor. Today I’ve got a quick video on protecting yourself as a landlord. Landlord Mistake 1: Failing to Properly Screen Tenants - There are a lot of bad apples out there - especially with regards to lower income rental properties. - Which makes tenant screening incredibly important. Solution - remember to verify employment, obtain current and past rental history and provide a thorough background/credit check. Landlord Mistake 2: Using a Generic Rental Agreement - Plain and simple, using a generic rental agreement or lease from off the internet is a disaster waiting to happen. - Each state has special language that must be included within the lease, many states have special disclosures that must be attached to the lease, and national lead paint pamphlets. - Additionally, states place limits on how much a landlord may charge for security deposits, how many days late the rent must be before a late fee can be charged, etc. Solution - Use a certified online landlord forms service that helps you through the process of creating a rental agreement for your state, consulting with your realtor or hiring an attorney is always recommended. Landlord Mistake 3: Ignoring your Rental Properties - Regardless of the inquiry - leaks, washer and dryer not working, ants in the kitchen… - The more you procrastinate the harder to ignore in the long term. - Addressing tenant concerns and potential problems with your rental properties quickly and effectively, will save you financially and may prevent any possible lawsuits. Solution - Send a handyman you trust out to the property to take a look at anything pressing, especially, leaks and electrical issues. Schedule quarterly check-ups. Landlord Mistake 4: Failing to Serve Tenant Violations - Regardless of your relationship with the tenant - falling behind on rent is not an option. - Patience is a virtue but investment real estate is a business. - Assess your tenants situation, determine if their reasons are valid - Serve the tenants quickly when their rent is not paid - Be stern, but also you want to work with them. Landlord Mistake 5: Over-Leveraging your Rental Properties Many investors get involved with rental properties for their leverage. Taking 1 property, leveraging the financing and turning it into 2, then 4, and so on and so forth. However, the problem is, if you borrow too much against your investments, or over-leverage, you will then leverage yourself out of any monthly cash flow. This means you will be in the red as soon as you have a vacancy, or unexpected property maintenance. Quick Tip: Predict your monthly expenses (mortgage, taxes, and insurance) at no more than 50% of your month rent, some cities you’re looking at 75% of rent, but in the end you should still be cash flowing. Rental properties offer great investment returns when leveraged correctly. I understand that being a landlord isn’t the easiest, but its one of the best ways to build long term wealth. Hopefully this video has made you aware of common Landlording pitfalls, and will save you from future hassles when dealing with rental properties. Again, this is Frank Chen with REIClub. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you’ll be automatically notified when we upload more quick video tips for you. Take care and good investing. https://youtube/watch?v=J_IA8vvaLe8
Posted on: Thu, 15 May 2014 19:27:07 +0000
Trending Topics
Recently Viewed Topics
© 2015