Most people think real estate investors make a lot of money and do little work. That is the goal, but achieving it is difficult. While it is possible to find rental properties that are available at a good price and can be profitable for the owner, the parts people overlook are the pitfalls, headaches, and potential nightmares that come along with managing investment properties.
Here are three things that can be nightmares for landlords and how to avoid them.
Problem properties
What looks like a gold mine initially can turn into a money pit rather quickly. Many new investors feel they know enough to skip getting a professional home inspection. It is always a good idea to obtain a completely objective opinion from an experienced home inspector before buying. Most issues related to property condition can be avoided with proper due diligence before the purchase.
Terrible tenants
If you know many investors or have owned rental property yourself, you have probably seen what nightmare tenants can do to a place. Hoarders typically do not understand their behavior themselves. There are also those spiteful, angry, or just outright disturbed people who intentionally damage properties. Terrible tenants are so common that there are some investors who seek out damaged rental properties that novice investors purchased, couldn’t manage properly, and are then forced to sell at a significant discount.
The best way to prevent nightmare tenants is to not let them get in the door in the first place. Diligent screening is necessary. However, there is a right way and a wrong way to accomplish this. Be sure to consult with an attorney who specializes in landlord tenant law about your screening process to be sure it is fair and complies with all laws.
Legal landmines
A lawsuit is one of the worst nightmares a landlord may face, and it is possible to do everything right and still get sued. One of the best ways to prevent legal disputes is to maintain a positive relationship with tenants. That does not mean allowing yourself to be bullied by people who are highly skilled at being the squeaky wheel.
Demonstrate to tenants that you are a knowledgeable landlord who takes pride in providing a safe and top-quality living environment. Doing so requires that you know your state’s and local area’s landlord and tenant laws. You absolutely do not want to be in a position where a tenant or anyone else informs you of an issue that you were not aware is your legal responsibility.
By following this advice, you should be able to minimize your chances of encountering nightmare tenants.
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