Problems With Do-It-Yourself Property Management

It’s said that the day you stop learning is the day you die. But while you should certainly pursue lifelong learning, do you really want to begin flying lessons with the plane in the air and you all alone in the cockpit? That’s the situation novice landlords find themselves in. Whether you’re an “accidental landlord” because you have a house you don’t live in but can’t unload, or you bought a property for the express purpose of getting rental income from it, the path to successful property ownership is fraught with risk. The learning curve of simply purchasing property is quite steep — dealing with lenders and sellers, realtors and inspectors. You need to consider the tax implications and carry costs and come to grips with how much you can really afford. It’s months of searching and sleepless nights over the risks entailed. And all that before you even start looking for a tenant. Then there’s a separate, perhaps even steeper, learning curve when it comes to tenancy rights and regulations. Even aside from legal matters, there are many pitfalls to avoid when it comes to renting a property to a tenant. Performing these simple tricks, even if it seems harmless to skip them, can keep you from running into problems on your maiden voyage.

1. Always get a deposit. The deposit is a guarantee of good behavior. When tenants leave for greener pastures, the security deposit ensures that they stick around to do a final property check to make sure nothing’s been damaged — or if it has, the bond ensures you get at least partial compensation for the repairs.
2. On that note, insist on a pre-move-in walkthrough with your tenant to fill in a condition form. It’s a great idea to take some pictures as well — make sure they’re timestamped — and have the tenant initial all the details. Then, be sure to email the completed check list and any pictures to the tenant so that you both have a detailed record of the state the property was in before it became occupied. This will prevent future arguments over the damage deposit.
3. Develop a detailed lease. The lease is an opportunity to address potential conflicts before they happen. A novice landlord may lack imagination when it comes to these conflicts, but there are many templates available online. It might be best to merge several of them, to make sure all your bases are covered. Read them carefully — this will be an excellent education in the ways landlord-tenant conflicts can arise. Figure out how these problems will be addressed ahead of time, so that you and your tenant are on the same page.
4. Have a thorough understanding of the Fair Housing Act and other tenancy laws and regulations. In particular, take care to understand what constitutes discriminatory actions. For instance, you cannot reject potential tenants because they have kids. Make sure you know the state laws for inspections and other ways you might unwittingly trample the tenants’ rights. It may be your property, but it’s their home, and that means you can’t just let yourself in without notice.

If you do embark on this rental property journey, we wish you luck. And if you run into problems, remember, Real Property Management is here to help.