Having an investment property sounds really simple, right? All you need to do is get some tenants, collect rent, and that’s it. The reality is that it’s not as easy as it sounds. Renting your property is a difficult task, especially if you don’t have a background in real estate and property management. Understanding what makes for a good investment and responding to the realities of the market are both crucial skills if you want to make the most of your property. Without that understanding, you’re in danger of making the following critical mistakes.
1. Failing to Get Clear on Your Goals
When you’re renting out a house, it might seem obvious what your goals are: Make money. But is that really all there is to it? Drill down. Is your goal to pay off the house and keep it as an investment? To rent it until you can sell it when the market gets a bit better? To build seed money for another investment property? Once you know your true goal, you can make better decisions about how to run your rental.
2. Failing to Do Adequate Background Checks
Does that couple with the baby seem just too earnest and adorable to pass up? Well, they might be adorable now, but if they have rock-bottom credit and you don’t check it, you’re not going to think so for long. It’s critical you do a full background check, and frankly, most laypeople don’t know how to do that.
3. Underestimating the Danger of Vacancies
It’s great to maintain a wealth-building property investment … but the game only works if the property is rented out most of the time. Without renters, you have to pay the mortgage, a responsibility that can quickly become unsustainable. Without a property management company to help you market, you might find it’s harder to keep your home full than you would have imagined.
4. Failing to Respond to Tenants
It’s tempting to view your home as “good enough” and let those calls about the annoying cabinet or the broken fence go to voicemail. But in this day and age of tenant rights, that can come back to bite you. Especially if the tenants try to fix the issues themselves, and end up doing more damage than good.
5. Not Using a Property Management Company
This is hands-down the biggest mistake we see landlords make. Yes, it’s tempting to believe you can do it all yourself, but the truth is, property management is a business because it’s difficult to do it all right. If you want to make money, find the right tenants, protect your home, limit vacancies and grow your wealth and security over time, you need the right help.
That’s us. If you’re ready to stop fretting over your properties and start rocking at the landlord game, we’re here to help. AZ Residential Management offers marketing, leasing and monthly management to make your life easier and give you your time back. Get in touch today.