Being a landlord has many rewards, but there are also some pitfalls. When things go smoothly, the process is enjoyable and profitable; however, landlord challenges can cause stress and the loss of revenues.
The following are five of the most common landlord challenges and problems that landlords face — along with some tips for fixing (or avoiding) them:
1. Late Rent Payments
Late or missed rent payments are perhaps the biggest obstacle that landlords face. One way to avoid this challenge is by including a penalty system for late rent payments in the lease and enforcing it. Be aware, however, that each state has limits on how much late rent fees can be — usually no more than 5 to 10 percent of the monthly rent. Also, the tenant must have agreed to the terms when signing the lease. Another way to reduce the odds of delinquent renters is by verifying income and screening all renters using a tenant screening service that includes a credit check.
2. Irresponsible Renters
Renters that don’t clean or maintain a property while renting it are another major concern for landlords. These landlord challenges are best addressed by having clear terms in the lease regarding what infractions will result in deductions from the security deposit. A specific fee system regarding damages and cleaning fees that the tenant agrees to when signing the lease will leave no room for argument if money must be deducted from it.
3. Disruptive Tenants
Tenants who play loud music, don’t control their kids or host large gatherings on a regular basis can be very disruptive to the other tenants in a property. Being clear about what is expected of tenants when interviewing candidates is crucial to finding tenants that are a fit. Ask for references from past landlords and consider using a reputable tenant screening service to find red flags such as a past criminal record.
4. Property Damage
Being negligent about cleaning is one thing, but property damage is entirely another. Again, this is what security deposit monies are for. Landlords can avoid “he-said, she-said” arguments down the road by documenting the condition of the unit with photos and a signed agreement with the renter before they move in. That way, any damage costs can be rightfully deducted.
5. High Turnover
Another major hurdle landlords face is renters that simply don’t stay around. A vacant unit means lost revenues, so landlords should do all they can to attract quality long-term tenants. Maintaining the units regularly inside and out is crucial, as is being a fair and responsive landlord.
While these five landlord challenges are all too common, landlords who address them will enjoy a more lucrative and lower-stress owner experience.