Being a do-it-yourself landlord in Ashburn VA can be stressful when you’re just getting started. With so much variation between investment properties and tenants, you never can be sure what to expect every time you lease a new property.
Even experienced landlords who have built a multi-property portfolio can run into the unexpected! Whether you are a brand new, DIY landlord, or you are an experienced Ashburn investor, here are some common DIY landlord mistakes—and what you can do to avoid them.
1. Not Enforcing Your Lease
It can be tempting to hear a sad story and have your generous spirit kick in. Whether it be late rent, missing rent entirely, a pet that isn’t on the lease, or a surprise roommate, you should always handle these situations precisely as you lay out in your lease. It isn’t a matter of not having compassion, either: it is a matter of protecting yourself.
If you inconsistently enforce the lease for your Ashburn rental property, you could come up against claims of discrimination at worst, or tenants who don’t take the lease seriously at best. What complications can come from inconsistently enforcing your lease?
- Consistently late rent: If you don’t enforce late fees and due dates, tenants will get used to having some wiggle room. Rent can come in later and later, and as a landlord, a good portion of that rent probably goes to a mortgage payment. Plus, if you enforce late fees only for some tenants, you could be liable for discrimination.
- Liability: If you have additional tenants who are not on the lease at your property, you have unscreened individuals living in your properties. You have tenant screening policies in place for a reason—so it is essential to ensure only screened and approved individuals are in your property. If you discover someone unauthorized living in your property, you should abide by the consequences outlined in the lease.
- Extra hours spent managing: When you don’t enforce the lease equally, you eventually end up with properties falling apart at the seams. It ends up taking more labor hours than usual to keep everything running because you have to revisit what exceptions are applied where. When you’re a DIY landlord, the lack of organization your properties suffer from can affect more than your investment: it can affect your well-being.
2. Improperly Screening Tenants
Choosing trustworthy tenants to live in your property is the best way to ensure that the rent is paid on time, and your investment is well cared for. Bad tenants can turn real estate investing into a nightmare! Your screening process—just like your lease—is designed to protect you and your Ashburn rental property.
How do you properly screen tenants?
- Set screening criteria before reviewing applications: Using one set of screening criteria and applying it to all tenants will protect you from discrimination liability.
- Use only reputable screening processes: Be sure to use a professional background screening service, so you don’t violate the FCRA. Background screening is rife with potential missteps—find a trusted partner to protect you during the screening process.
3. Failing to Set a Smart Rental Rate
Just because your mortgage is $1,500 per month doesn’t necessarily mean you’ll collect $1,700 per month! Rental rates are independent of your mortgage. Instead, they are a complicated calculation consisting of:
- Comparable properties (comps): What are the comparable rental rates for other similar properties in your area? What is the overall average rental rate? What is the average income?
- Market pressures: What is the local rental vacancy rate? This is supply and demand in action; if there are few rentals available rents will rise, if the market is saturated with vacancies, your income-earning power will naturally be affected.
These are just a few of the considerations when setting a rental rate. If you need help setting the right rental rate, pursuing a free rental analysis from a trusted property management company in Ashburn could be just what you need.
4. Not Managing Maintenance Correctly
When it comes down to it, maintenance is one of the most significant factors determining tenant satisfaction. Tenant satisfaction then leads to more renewals—and fewer days turning a property for a new tenant. It is expensive to find a new tenant when you’ve already got one you would like to renew!
While you have to balance the cost of maintenance with your bottom line, you should also work to get the job done fast and right the first time to minimize disruption to your tenant’s life. The better you are at managing this, the more likely your tenants are to stay—and the more sheltered your financial goals will be long term.
Beyond the desire to retain high-quality tenants, keeping up with maintenance helps keep your Ashburn rental property at peak earning power—and may even serve to stave off some severe disasters.
5. Not Hiring Professional Help
Hiring professional help means you don’t have to look out for these DIY landlord mistakes: your professional property manager in Ashburn will look out for these elements for you—so you can have landlord peace of mind.
What’s a great way to get started? Get rid of these mistakes for good when you start by contacting us for a FREE rental analysis! We will let you know what your Ashburn home will rent for—and answer any of your questions about how to grow your long-term wealth through professionally managed real estate.