The feeling of owning a property is like nothing else. But being a landlord is not as easy as it may sound. It’s not only about buying a home. You have to take care of the maintenance, and mortgage payments. The best way to take care of the latter payments is by opting to rent out the property you have. You can either rent out the entire property or a specific floor. It’s your choice. For this purpose, the landlord needs to work on his business, interpersonal and communication skills at best.
And this is where most of the amateur landowners lack a skillset.
Because they have little to no experience in renting the property, we have highlighted the common mistakes you might make.
Not enough screening
One cannot put enough emphasis on a proper screening method for tenants. You are already anxious to rent out the property. So thinking the screening process is not that hard or important? You are wrong. This is the first step towards accepting applications.
Especially if you are interested in renting out the newly bought property in LSC in Lahore, ensure that all the provided information is legit and eligible. Even if the tenant seems like a good fit, you still need to confirm the whereabouts of the previous landlord, job, credit score, and financial health. This is to ensure that they can pay the rent on time and are capable enough to maintain the property as well.
The property will always flourish
Sometimes it is easy to overestimate the value of the rental property. One can even be mistaken by the real estate market trend. It might take a good amount of time, let’s say a few months before you can actually find good tenants.
Keep this in mind, so that you can plan your monthly expenses and bills accordingly. Take out the time to manage your finances and create backup funds for a safety check.
Underestimating maintenance cost
As inflation is going strong, so are the monthly expenses. As a landlord, it is your responsibility to take care of the necessary maintenance cost. Because you want to attract new tenants, making necessary repairs and adjustments to the property are important.
While creating a budget for the expenses, you need to keep a hefty amount for this purpose aside. You must be prepared for any kind of emergency.
Renting is not a hobby
Some may think that it is alright to rent out their property to a friend or a relative without proper consideration. Later on, they find themselves knee-deep into trouble with them. Rental properties should not be mistaken as a hobby. It is a legit business that you are jumping into. You have to keep a separate account for this purpose. A reliable bookkeeper can help you to manage the details in the long run.
Also, you will be needing to consult with a professional tax consultant to ensure your taxes are paid on time.
Using verbal agreements only
Although you may come across the ideal tenant, you cannot base your business on handshake deals and verbal promises. It’s crucial to have a written lease or rental agreement and make sure your tenant is aware of its provisions before signing it in order to safeguard your company and property. This will give you written, legally-binding documentation to produce in court if there are any questions regarding the tenancy.
Make sure you’re using the appropriate form by carefully reviewing the lease-related legislation in your state. On our website, you may get free rental agreement templates for each state.
Interviewing your tenant while breaking the law
Knowing the Fair Housing Act is essential for landlords to ensure they aren’t unintentionally discriminating against potential renters throughout the interview process. Otherwise, you run the danger of facing legal repercussions.
Abusing your renters
It could be tempting to ignore your tenants if you haven’t heard from them in a while but they are still making their monthly payments on schedule. Without periodically checking up on them, however, a variety of problems could develop, from unresolved maintenance or repair concerns to lease breaches. In the long term, it will save you time, money, and hassle if you keep in touch with them every few months and arrange yearly property inspections.