They say the definition of insanity is doing the same function repeatedly hoping for different results. If this is the case, you can call almost every landlord insane!
As a landlord, I too tend to commit the same mistakes over and over, despite fully knowing the error I am making. I compiled this list as a lesson to myself, and if it can help others along the way avoid these – then my mistakes have not been in vain! Without further ado:
Download Your FREE Tenant Screening Guide!
Hey there! Screening tenants can be a tricky business, and this critical step can be the difference between profits and disaster. To help you with your real estate investing journey, feel free to download BiggerPockets’ complimentary Tenant Screening Guide and get the information you need to find great tenants.
Five Landlording Mistakes You Should Avoid – But Don’t
- Procrastinating: This disease affects nearly every person alive, but can be a silent killer to a real estate investor. Waiting to do maintenance “until later” can cause huge headaches later. I once was told by a tenant that a toilet wasn’t draining very well. Keep in mind, it wasn’t completely broke, just slow. I put the maintenance job on the back burner until I got a call late at night three weeks later – the toilet was overflowing. Not from flushing – but because the tenant stopped flushing it three weeks earlier but continued to use it, daily. I don’t need to share the rest of the story with you, but lets just say I will never again wait to repair a toilet.
- Working on a Tenant’s Timeline Instead of Your Own: This one hits me hard today. I spent the last several days preparing a unit for a tenant. The tenant wanted to move in quickly, so I hired three others to work with me to completely rehab this apartment and get it rent-ready. We were able to fully remodel this unit in less than three days so the tenant could move in – but I spent close to $500 on extra labor and worked us all 12 hour days to make it happen. All for what? So the tenant could move in a few days early and I could collect a few more dollars in rent. While the tenant is moved in and happy, I look back and see the ridiculousness in this now.
- Trying to Do It All: “If you want a job done right, do it yourself.” No doubt you’ve heard this line before, and probably said it to yourself a number of times. As a landlord, there are many times that it is necessary to do a job yourself to save a huge bill or get something done quickly. However, the vast majority of the time – other professionals are better, faster, and more efficient than you. For example, plumbers charge nearly $100 per hour, but when they can clear a drain in five minutes that might take you three hours, it might be worth the charge. As a real estate investor, it often comes down to the question, “is your time best spent as a plumber or a real estate investor?”
- Letting Emotion Guide Your Decisions: We are emotional creatures, so it is impossible not to let emotion into the decisions we make. However, how many times have you let your screening standards slide just a little bit because you felt bad or been slow in enforcing a late fee? Decisions based on emotion are almost always the downfall of any landlord and the easiest to remedy. Have a (written) plan for every aspect of your business – and stick to that plan.
It felt good to get that in writing. I am confessing my sins and moving forward. As a real estate investor, it is important that we learn from our mistakes and not simply accept things the way they are. By sticking your head in the sand and continuing to make the same mistakes over and over, you are not only hurting yourself but also your tenants, your family, and your business.
What are some mistakes you are learning to avoid? Comment below!
Image source: http://www.sxc.hu/