Starting out in the real estate game, there is a lot to learn. Buying a rental property in Boston and becoming a landlord is exciting, but there are many, many pitfalls waiting to trip you up. Luckily, you can learn from the mistakes of other beginning landlords and (hopefully) avoid them. Another way to skip the mistakes is by hiring a property management company. They handle much of the dirty work of being a landlord so you don’t have to. The following are common landlord mistakes that a property management company can help you avoid.
Over-estimating Rent Rates
It is easy to think that your property is worth more than it actually is. Odds are you bought the rental property to make more money, so it is only natural that you would try to make as much money as possible. Setting a rental rate that is too high will be bad for business. It will take you much longer to find tenants, and the longer you have no tenants, the less money you make. In fact, it is often smarter to set your rental rate below market rent so that your rental property stays occupied. Property management companies can take the guesswork out of setting rent rates. They will help you set a rent that makes the most sense and will maximize your rental income.
Assuming Your Properties Will Always Be Rented
This mistake goes hand in hand with the last. If your rental rate is too high, it is more likely that your rental property will sit vacant for months at a time. A property management company can help eliminate this problem by helping set rent and by marketing your property to new tenants. Still, there may be a month or two where your property is unoccupied. Beginning landlords sometimes do not anticipate this and then they cannot afford the mortgage payment for their rental property without the aid of rental income. When purchasing a rental property, ensure that you will be able to afford the mortgage payments without supplemental rental income—just in case.
Relying on Verbal Agreements
If you do not have it in writing, there is no way to prove it exists. Beginning landlords are often too trusting of their tenants. Property management companies can help draft leases and other documents to ensure that any agreements you have with your tenants are in writing. This can help you avoid frustration—and even legal trouble—in the future.
Underestimating Maintenance Calls and Expenses
Another common landlord mistake is assuming that maintenance requests and expenses will not be that significant. Things will fall apart in your rental property. Beginning landlords should live by Murphy’s Law: anything that can happen will happen. While property management companies cannot help you deal with the expenses associated with maintenance calls, they can certainly help with dealing with them. Property management companies deal with maintenance calls so that you don’t have to.
Not Starting the Eviction Process Right Away
Accepting partial payments is not cost effective. Landlords sometimes have difficulty laying down the law with tenants because they want to be nice or get good reviews. You cannot do that. Landlords must enforce late fees and start the eviction process right away. Property management companies can completely eliminate this landlord mistake. Property management companies will handle late fees, evictions, and all tenant relations. The screening process that property management companies provide can also prevent trouble tenants from ever moving into your rental unit.
Avoid Other Landlord Mistakes!
There are plenty of other mistakes that beginning landlords make, and property management companies can help you avoid all of them. If you are looking for a property management company to team up within the Boston area, Keyrenter Boston Property Management can help you run a smooth ship at your rental property.