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Top 3 Ways to FAIL as a Landlord.
Often times in this business, we talk about the great things about owning rental properties and, believe me, there are awesome things when you buy a rental property, but many people are surprised when they buy their first rental, especially if they’re going to landlord it themselves, they’re gonna manage it themselves, some of the problems that they can face. So today I’m talking about three big problems that can have some big impact, financial impact, on landlords if they don’t know what they’re getting into.
The first one is not following laws and regulations. Some landlords don’t quite understand that there are agencies set up and there are different groups that are set up to protect tenants, and they’re watching over the tenant and they don’t realize that they’re being watched as a landlord. For example, Fair Housing with anti-discrimination, government and state statutes that are set in place to protect tenants, local ordinances and city ordinances, as well as IRS regulations, and they’re watching you. They’re watching landlords to see where they’re messing up and the penalties for violating some of those, some things that are with these different agencies, can be pretty serious. That’s number one.
Number two is poor planning and budgeting. Some landlords get into owning rental properties without the expectation that things are going to go wrong, that something’s gonna happen, that there’s going to be a major repair, there’s gonna be some vacancy, and they don’t really realize that getting into it, so they don’t plan and they don’t budget for it. They also don’t budget for maintenance properly, and expect that at least 10% of the rents are gonna go towards it, so when they’re looking at doing an evaluation or a ProForm on a property, they sometimes don’t account for maintenance and that could be a big problem and a big frustration and a way that they can fail as a landlord.
Number three is not running it like a business. This is where we see a lot of investors, landlords, that start managing on their own, or even they’ve hired out a company, but they don’t run it like a business. Some of the ways that they don’t do that is they can’t disconnect emotionally from that property. This is a business and it should be ran as a business. You should have a business plan, you should have structure, processes and policies in place, having an understanding of what to do in different situations, and you gotta not take it personal, not be emotional with your decision making. Be very strategic, based on your business plan, with this rental property. Now, if you don’t know how to run your rental like a business, hire someone that does. Hire a firm, a property management company, that can oversee that and run your business. You can leverage their management, leverage their time, leverage their skills, leverage their understanding of the market, understanding of everything that is involved with being a landlord and managing rental property.
So, here at Keyrenter Property Management, we help. We do everything from start to finish for landlords, for investors. We can help them buy properties, help them find them. We help find the tenants and screen the tenants. We’ll collect the rent. We’ll handle maintenance, we’ll oversee the property. We’ll take all the phone calls, handle all the issues, handle the complaints, handle the other problems that come up, the hassles that surround, often times, rental properties. One of the reasons that people exit with their rental is they just get fed up with the problems, so you can leverage a property management company, you can leverage Keyrenter to do that for you. It’s nice that you can buy an asset and hire Keyrenter and not have to handle or deal with anything. One of the great things is we wire the money right into your bank account every month, so you don’t even have to deal with that.
If you’re interested in learning more about Keyrenter, more about this topic, feel free to give us a call. We’re happy to help out in any way we can.