Becoming a DIY Landlord? 5 Mistakes to Avoid
Many benefits come with owning and leasing property.
Rental property is a good source of passive income, appreciates over time, and serves as a hedge against inflation. In addition, property owners can often get tax breaks at the end of the financial year.
Considering the cost of buying a property, some property owners consider self-managing their rentals. These individuals are known as DIY Landlords. There are many reasons why someone would decide to manage a property for themselves.
But your new status as a landlord doesn’t give you instant knowledge of the property industry. DIY landlords are bound to make mistakes as they deal with repairs, provisions of the law, and handle various requests from their tenants.
The team from Leenan Property Management is here to instruct new DIY landlords on some common mistakes to avoid.
Not Having a Written Lease Agreement
It may happen at some point that a family member, friend, or acquaintance approaches you and asks to rent your unit. Since you already have a relationship with this person, you may consider just having an oral agreement. We highly advise against this.
A lease agreement is the contract that establishes, sustains, and terminates the tenant-landlord relationship. It’s a legally-binding contract with clauses and provisions in local and federal law.
The agreement also contains each party’s duties during the tenancy.
It’s hard to refer to and enforce the lease with a “gentleman’s agreement”. In the case where a property issue is escalated to a court of law, you may find yourself in a bad financial/legal pitfall.
Not Regularly Inspecting the Property
As a property owner, it’s your responsibility to ensure that your rental is in a safe and habitable condition during the term of the lease. This rule applies to both the interior and exterior of the property.
Most landlords wait for a call from their tenant requesting repairs. However, you can avoid long-term property issues by carrying out regular inspections of your property. By being proactive, you can reduce the frequency and cost of repairs in the long run.
Another benefit of inspections is that you can make sure your tenant is respecting the lease terms. You’ll have an excellent opportunity to check whether the tenant is adhering to the provisions of the lease.
At Leenan Property Management, we recommend staying on top of your property’s condition at all times. This will not only make sure your rental is legally compliant, but also that it maintains its value.
Not Expecting Vacancies
Many investors will buy Saskatchewan real estate as an investment because of its reputation as a source of passive income. However, you need to know that when a lease expires, you’ll have to quickly find a new tenant or risk losing money on a vacant property.
With vacancies, not only do you miss out on rent, but you face other financial burdens as well: There’s the cost of repairs and renovations, the cost of utilities, and handling showcases and marketing fees.
We suggest that landlords keep an eye on the remainder of their lease term. When there’s a few months to go before a tenancy ends, approach the tenant and suggest renewing the lease. If they plan on leaving, start marketing the property early to ensure you don’t miss out on any rental income.
It’s also a good idea in general to have a marketing plan in mind in case a tenant suddenly decides to break their lease.
Not Having a Tenant Screening Solution
Often, a landlord will lose their tenant and want to quickly replace them in order to save themselves from a loss of income. The problem is that they’ll often forgo the necessary background checks in the process of trying to quickly get a replacement tenant.
On top of this, it’s generally harder for a DIY landlord to screen tenants properly due to a lack of resources. Having a bad tenant can be a massive headache and make you rue the day you started leasing your Regina property. Qualities of a bad/ problematic tenant include failure to pay rent on time, violation of the lease terms, and not maintaining the property in a reasonable manner.
Not Handling Evictions Properly
It’s pretty much inevitable that a DIY landlord will have to evict a tenant at some point. That’s just the nature of the industry.
After years of renting to the same tenant, it’s even possible that you’ll find it hard to evict them when it comes time. You’ll be on a first-name basis, and probably know each other’s families.
But as a property owner, you need to enforce the lease the same with all tenants. If a tenant becomes problematic, no matter how long they’ve been renting, you shouldn’t be afraid of taking legal action if needed.
You should also be aware that there are clear rules and provisions on how an eviction should be carried out. It’s a strict procedure that you should follow to the t.
To avoid this issue, hire a property manager like Leenan Property Management. We have the experience, expertise, and capacity to guarantee that evictions are carried out in a legally compliant manner.
Aside from those described above, there are several problems you’ll be faced with when self-managing your rentals. You can expect late-night calls and requests from your tenants and be expected to meet these demands without fail.
Unburden yourself by contacting the leading property management company in Regina. Leenan Property Management has a reputation for meeting the needs of its clients, their properties, and those of the tenants.
We care for your real estate investment in real estate as though it were our own! You can expect your property to be in great condition all year long, that rent will be collected promptly, and you’ll be fully compliant with all provisions of the law.
Get in touch with us today!