If being a landlord were easy, everyone would be doing it. As it is, for an inexperienced landlord who's never had to deal with the intricacies of looking after an investment property, there are countless moments where making a simple mistake out of ignorance can set you back. And you thought getting an investment home loan would be the hardest part!
However, knowledge is power, and by making yourself informed on some basic landlord mistakes, you can help to avoid them in the future. Here are just a few.
1. Treating the property like it's your own home
In a sense, the investment property you're renting out is your own place: You sought it out, it's your name on the Certificate of Title and you're paying off the mortgage.
But as a landlord, it can be perilous to think this way. As long as you've got tenants who are keeping up with the rent, it may be your property, but it's their home. A nosy landlord who never goes away will just make them more likely to seek a better deal elsewhere.
2. Not treating it like it's a business
Depending on where and what kind of property you've invested in, there's a good chance you've taken out a home loan for anything from $400,000 up. That's not a sum you can simply sneeze at.
Just because it's a house you're spending that money on doesn't mean you should take it any more seriously than if you bought a restaurant. If you're hoping to make a return, then you can't treat it as something you do in your spare time – invest your time and effort, as well as your money.
3. Dealing with the tenants the wrong way
Choosing the right tenants and maintaining a good relationship with them can be the toughest part of being a landlord. Many will hurry along the tenant selection process in order to get someone paying rent as fast as possible.
Rather, you should take the time to do a thorough background check on your potential tenants, calling up their referees. Once you've brought them in, avoid becoming too friendly. You want the appropriate level of distance that keeps things cordial without it clouding your judgment down the line.