I thought it would be helpful to write a post about the top 5 mistakes we have made over the past several years as landlords. Many of these mistakes will probably sound like no brainers but you would be surprised at the foolish decisions one might make when anxious to fill a vacant property. So here they are:
Mistake #1: Allowing a "section 8" tenant to move into a property before the housing authority has approved it. Yes, I know... it sounds ridiculous. In this situation we thought for sure the home was in perfect move in condition and would be quickly approved.The tenant had to move out of her previous residence rather quickly, so against our better judgement we allowed her to move in pending approval from the folks that were actually going to be making her rent payment. Bad idea. Long story short, there were a few items they requested that we take care of before they would approve it and we went almost 3 months before receiving any payments from them.
Mistake #2: Renting to tenants with horrible credit history. Again, I know this sounds ridiculous. This was a choice we made very early in our property management venture and it was a choice we ended up regretting. If you review a credit report for a potential tenant and the findings are that they have a habit of um...well not paying their bills, chances are they are not going to pay you rent. In this case the tenants lived in one of our rentals for two years and paid rent on time maybe 3 times. Although the late fees were helpful it was still nerve wrecking. We ultimately had to evict them when they stopped paying all together.
Mistake #3: A few days ago I devoted an entire post to this one. Not having a tenant sign a no smoking agreement or having a no smoking clause in the lease. This was a rookie mistake that I'm sure will cost us whenever this tenant moves out.
Mistake#4: Allowing a tenant to move in without a signed lease agreement.The first time we rented out our condo, it was rented to a good friend of my husbands'. This was also several years back and we were very new to the whole landlord thing. We didn't have him sign a lease which actually worked out OK in the long run but we were very fortunate. This is a good way to put a financial strain on yourself as well as lose a good friendship. Not recommended.
Mistake#5: Not listing all tenants names on a pay or quit notice. Now, this may be a process that varies from state to state but as I mentioned in my post HERE about our eviction process, if we have not received rent by the 5th of the month we mail out a "pay or quit notice". We then have to wait another eight days before we can turn the situation over to our attorney to file for a court date to start the eviction process. Unfortunately I have made the mistake in the past of not listing all tenants names on the pay or quit (we had a lease with 4 people in one property). After our attorney realized my error I had to mail a new pay or quit and wait another eight days to file with the courts. Considering that would have put us around the 21st of the month with no rent and still having to wait weeks for a court date, it was a little frustrating to say the least.
Well there you have it. Don't make our mistakes!