{"id":109578,"date":"2019-04-12T05:00:26","date_gmt":"2019-04-12T11:00:26","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=109578"},"modified":"2021-03-16T14:53:20","modified_gmt":"2021-03-16T20:53:20","slug":"costly-mistakes-landlords-limit-profitability","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/costly-mistakes-landlords-limit-profitability","title":{"rendered":"4 Costly Mistakes Landlords Make That Limit Profitability"},"content":{"rendered":"

No matter which way you slice it, you\u2019re in the business of turning a profit. You didn\u2019t become a landlord as some saintly act of giving back to society.<\/p>\n

You did it because you want to put your money to work and generate income. Unfortunately, you may be making costly mistakes that are killing your profitability.<\/p>\n

4 Expensive Mistakes Landlords Must Avoid<\/h2>\n

Successful landlords aren\u2019t cheap, but they are definitely cost-conscious. In other words, they understand that costs add up over time, so they make smart choices to maximize revenue.<\/p>\n

For example, a $100 mistake might not seem like a big deal in isolation. But if you\u2019re making a $100 mistake every month on three different properties that you own, you\u2019re costing yourself $300 per month\u2014or $3,600 per year!<\/p>\n

This can create cash flow issues and prevent you from being able to accomplish your long-term goals.<\/p>\n

There\u2019s a time and place for spending money to set yourself up for success. However, there are also ways you can limit your expenses to maximize your revenues. Here are some expensive mistakes to avoid.<\/p>\n

1. Investing in the Wrong Properties<\/h2>\n

You make your money when you buy a property. Repeat that out loud: You make your money when you buy a property.<\/em><\/p>\n

The biggest profitability problem landlords have is created by investing in the wrong properties\u2014or overpaying for the right ones. If you make either of these mistakes, you\u2019ll find it nearly impossible to generate a profit that\u2019s worth your time and energy.<\/p>\n

Bad properties have slim margins and a tendency to need lots of work. While you won\u2019t find a perfect rental property<\/a>, you should practice greater patience and seek out ones that have the opportunity for greater gains. This will provide more margin for error.<\/p>\n

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2. Poor Tenant Screening<\/h2>\n

After selecting the right property and making a smart investment, nothing matters more than tenant selection. And if you don\u2019t have the right screening processes in place, you could seriously impact your long-term profitability.<\/p>\n

A bad tenant will cost you<\/a> in multiple ways, including:<\/p>\n