Landlording & Rental Properties

The Top 8 Mistakes Made by Rookie Landlords

Expertise: Landlording & Rental Properties, Real Estate Investing Basics, Flipping Houses, Business Management, Personal Development, Mortgages & Creative Financing, Real Estate News & Commentary
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Everyone has been a rookie at something at some point in their lives, whether it was in a new school, job, or sport — or even as a landlord.

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Being a rookie means that you lack the experience of more seasoned players. This lack of experience often translates into so-called “rookie mistakes” because some things just have to be learned from experience.

Over the years, I have talked with many a rookie landlord. Many times these talks arise due to some sort of problem the rookie has encountered and they are now seeking advice to solve it. We more seasoned landlords tend to see these same rookie mistakes over and over again.

The Top 8 Mistakes Made by Rookie Landlords

The following are what I think are the top eight rookie landlording mistakes, and if you avoid them, you’ll be sure to have a higher chance of success!

1. Rookies Do Not Properly Screen Tenants

Tenant screening is perhaps the most important thing a landlord can do.

I see too many rookies take potential tenants at their word and forgo the full background check thinking it will save them time and/or money. Unfortunately, rookies just do not seem to have built up their BS detectors yet and believe what potential tenants tell them.

2. Rookies Do Not Treat Their Rentals as a Business

Rookies will co-mingle funds, lose receipts, and generally keep things unorganized.

Landlording is not a hobby. If you want to make money you have to treat landlording as a business. Otherwise those dollars will disappear and you will be left wondering where they went.

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Related: 2 Simple Tips For Beginner Real Estate Investors

3. Rookies Accept the Sob Story

The first few time your tenant is late with the rent, I guarantee that you are going to get some kind of sob story.

Of course, being the nice person that you are you will want to let them slide a bit. After all, you don't want to be a jerk, right? Wrong! Learn not accept the sob story. Rent is due when rent is due, and if you let things slide once, guess what you have taught them? Think about this. Will your bank or lender let you slide? Will the grocery store? No. Does that mean you can't make an arrangement for exceptional circumstances? No — but you need to.

4. Rookies Do Not Get Everything in Writing

Rookies will often do a deal with a verbal handshake, only to get burned later with the “I thought you said I only had to pay this much?” Always get everything in writing. Insist on it.

5. Rookies Do Not Understand the Costs

What does it cost to paint a small bathroom?

How much is it to snake out a sewer line or to keep the grass cut? How about paying someone to do your taxes? If you do not understand these business costs, you are setting yourself up for failure. At the end of the day, you will wonder where all the money went.

6. Rookies Do Not Know the Law

If a tenant chooses not to pay you, you can’t just change the locks or turn off the utilities.

There are laws and rules that we have to live by. I have seen more than one rookie landlord make a mistake with a deadbeat tenant that ends up costing them time, money, and aggravation.

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7. Rookies Never Do Property Inspections

Rookies often think that if they never hear from their tenant then everything must be alright.

Nothing could be more wrong. You need to go by every once in a while and make sure all is OK. Do not equate silence from the tenant with all is well.

8. Rookies Rent to Friends and Family

Rookies think renting to friends or family is the perfect scenario.

Related: Don’t Make This Mistake and Leave Money on the Table When Syndicating Deals

After all, they believe they know them and their character. In reality, this is an awful thing to do unless you never want to speak to those friends or family members again. When money gets involved between friends and family, believe me, the character suddenly changes for the worse. Be smart. Do not rent to friends and family in the first place.

[Editor’s note: We republished this article to help our newer rookie landlords learn what NOT to do.]

So what would you add to the list of rookie mistakes? Have many of these mistakes did you make when you were a rookie?

Share your story with your comments!

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in ...
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    merced fields
    Replied over 5 years ago
    Great article. I would add: – don’t get overly friendly with tenants or think of them as friends. Maintain boundaries and stay professional. – When doing due diligence on a purchase of multi-units ask to see proof of rent roll for the past 6 months. Don’t take the seller’s agent’s word on the rent collected or the cap rate. – Assume your property inspection missed something and have cash ready for a major repair that will come up within a year of purchase. Property inspectors don’t check behind walls or under floors. There is a lot they can miss regarding plumbing, electric, structure, HVAC.
    Matthew Jones from Moreno Valley, California
    Replied over 5 years ago
    Excellent article Kevin, thank you! Cheers.
    Pat Tibbetts Investor from San Antonio, Texas
    Replied about 4 years ago
    Sorry for the necropost, but this blog was updated and linked in the newsletter. Great article! I would add: 9. Rookies try to do everything themselves. No further explanation necessary. Many have posted about the value of a solid team.
    Clay Rhodes Investor from Newport News, Virginia
    Replied about 4 years ago
    2 Is my biggest issue. I have been buying small single family homes to hold and rent for a little over two years. I just closed on my 5th property and it’s currently in the rehab phase. I don’t have a problem co-mingling funds as my rental accounts are with a separate bank from the household accounts. My question is what program or system are you guys using to keep everything organized. Right now I have a manila envelope for each house to keep things such as receipts ect. I feel like there has to be a better way.
    Frank S. Specialist from Chicago, IL
    Replied about 4 years ago
    Great tips
    Keely Marshall Investor from San Luis, Colorado
    Replied about 4 years ago
    Great recommendations! My ex -husband & I had some investment properties & I swear one of our rental properties seemed to be a sob story magnet & I always had to be the bad guy because he was too soft ! I even had to go the prosecuting attorney’s office to get one tenant evicted . Every month she had some crazy sob story & I just told her I’m so sorry you’re having such a string of bad luck ?but your sob stories don’t pay the bank ! I so badly wanted to throw her belongings out in the yard but I followed the law & the first eviction notice was enough to finally get her out of there but it was a total PIA! Looking back on it now ,I realize where we failed was in the initial screening process . A lot of our headaches could possibly have been avoided if we had properly screened them better . Hindsight is always 20/20 . You live & you learn .
    Brad Russo Professional from San Francisco, California
    Replied about 4 years ago
    Good tips. Especially I like the second one. If landlord wants to receive a solid income from rental, they need to treat it seriously. I saw many articles on this subject on the Internet. They might be of a great help to landlords. One more mistakes that I would like to add is not solving maintenance issues. Essentially, a quick response can not only be good for your property, but for business as well. Some application platforms, for instance, like Rentberry, allow tenants to submit a maintenance request, describe what happened and set up the priority. Maybe more landlords stop to ignore the requests with the help of such services.
    Leticia M. from Virginia Beach, Virginia
    Replied over 3 years ago
    This article was definitely for me. I am known to be a softy, I am also known to help my family and friends in need. But I realize that I have to have thick skin in this business and stick to my guns…even if it’s eating me up inside. Thank you.