Top 3 Mistakes Landlords Make
Owning rental property in southwest Florida is a great way to earn passive income. It’s also a great way to lose money if you don’t know what you’re doing. Property management in Naples involves more than trading a signed lease for a set of house keys. If you want a success rental property business, avoid these common mistakes landlords make.
1. They don’t treat the rental as a business.
It doesn’t matter whether you own one rental house or an apartment building, renting property is a business, and you have to treat it as such. You have to repair damage to the property and keep track of maintenance. You have to collect rent each month. You have to take calls from tenants and resolve problems that occur during the lease period.
There’s also plenty of work to do behind the scenes. You have to keep records of everything from the amount of rent you collect to what you spend for maintenance, insurance and taxes. The property should have its own bank account that you use for depositing rent and paying expenses related to the property.
2. They charge too much or not enough for rent.
Determining what to charge for rent is one of the most challenging parts of owning rental property. If you charge too much, you alienate renters who can’t afford it. If you charge too little, you may not make enough money to cover the property’s expenses. This puts you—and the property—at risk.
Property owners use several different methods to determine their rent amounts. Some people charge a percentage of the property’s value. Others multiply the cost of the mortgage payment, insurance premium and property taxes so they can pay them and still have some money left over. These methods fail to take into account factors like the location and rental market which play a significant role in the property’s value.
3. They don’t vet their tenants before renting to them.
You don’t make money when your property sits vacant, but you stand to lose money if you don’t find the right tenant. Avoid the temptation to hand the keys over to the first person who agrees to your price. Instead, take the time to make sure the individual has the resources to pay you. Verify that the person has an income and a history of paying bills on time. Talk to previous landlords and employers.
Your success as a landlord depends on how well you take care of your property and your tenants. One way to avoid making these landlord mistakes is to work with a property manager who understands property management in Naples. Skip the learning curve and let our team of real estate professionals at Woodruff Property Management help you take care of your property.
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