To start something new is to accept that you will probably fail at first while figuring it out. You don’t know what you’re doing and while you can research and study up, some things must be learned the hard way. No one has perfect balance without falling a few times. No one can master a new language without accidentally saying something dumb. No one can start a new adventure without getting lost somewhere. Everyone must start somewhere, and that means that usually, everyone will make some pretty bad mistakes along the way. If this is part of your research on getting started as a landlord, that’s wonderful! There are some big mistakes you could make, but you can avoid with just a bit of research.
Here’s the thing, tenant screening can require time and money. Sure, it seems like a great corner to cut: faster acceptance time, more people applying, and your property may be vacant for a shorter period of time. The problem is that tenant screening exists for a reason. There are certain liabilities you do not want to risk on your property. People who are prone to property damage are a costly concern. If someone has been arrested and convicted for damaging property there is no promise they would have care and respect for your property.
Then you have people who were arrested for violence, such as physical or sexual assault. They present a danger to you or your other tenants and their neighbors, leaving you with a very high chance that you will not be safe with them on or near your property. This is especially true if your property happens to be near a school, which usually is a great selling point for families. Your job as a landlord is to provide a safe space for a life, and you cannot do that if the person you are renting to is on their own a danger.
The absence of standards breeds discrimination, and with discrimination breeds a bad reputation and plenty of lawsuits. Proper tenant screening not only helps vet your applicants, but helps you write the standards that prevent discrimination based on protected classes. Without tenant screening, it is easier to slip into subjective standards and assumptions that could be used against you in a court of law. This could mean assuming someone is unruly based on outward appearances, the appearances of how they care for their clothes or cars, etc., things they may have posted on social media, or a gut feeling that can’t be explained. Relying on tenant screening is a much safer way to vet your potential renters and keeps you safer and guarded from potential lawsuits.
Added Spending, But No Value
People love upgrades – sometimes. A great selling point is recent renovations, but it does have to be the right kind of renovations. Throwing money at a problem only works if you’re thoughtful about it. If you’re going to spend your money, try to do it wisely. Sure, if you just re-stained your hardwood flooring, that’s nice but there’s no guarantee your applicants will care about it. It’s one thing to re-stain your flooring in your own private home because it’s yours, you’re thinking of what the final product will look like along all your personal knickknacks and curtains and rugs. Your tenant isn’t thinking like that because they didn’t get to pick that color. It’s good to renovate! Just pick before you spend that money. Tenants prefer renovations that directly affect their quality of life – a new fridge, a gas stove, insulated windows, or improved storage in the pantry will go much further than ‘we just painted.’
No Online Payments
Being online is its own risk and reward. if you send some first. It is good to be wary of putting your information online. However, if you don’t have online rental payment options, you’ll not only have fewer people applying, those who do will be quite disgruntled about it. Online rent payments make things so much easier. They don’t need to interrupt their schedule to find a time to drop off a check, or go out and get checks in the first place, or find an ATM for the hard cash they may need and risk getting robbed. Equally, it means that you don’t have to go to the bank every month. Plus, with online automatic payments your tenants don’t have to worry about forgetting and you can relax knowing an automatic system will keep late payments from happening. It just makes everyone’s lives a little easier.
Starting off with a business venture like investment properties is a great way to expand your horizons even if starting off can be scary. Everyone makes mistakes when they first start off, so it’s okay, but on the bright side, there are always ways to play it safe.