Making mistakes with your rental property is easier than you think.
Many new landlords and even experienced investors think managing a property is as easy as finding a tenant and collecting rent. But, owning and operating a rental property is a bit more complex than that, and a lot of expensive mistakes can be made. If you want to have a good experience with your Fort Worth rental property, make sure you can avoid these common errors.
Not Knowing the Fort Worth Market
There are many mistakes that come from not knowing the market well. If you don’t understand the rental market as a whole and the nuances of the micro market in the neighborhood where you have rental properties, you run a big risk of pricing it incorrectly. You might also make bad decisions about how to market the home, where to find tenants, and how to make improvements.
For example, installing stainless steel appliances and granite countertops in a home that belongs to a neighborhood where most rents are around $800 per month is a waste of money. The tenants applying for your home won’t demand high-end upgrades, and they won’t be willing to pay more rent for them. You need to know what the competitive rents are, and you need to know what your tenants are looking for in a rental property.
If you don’t know your market, you won’t know whether a rental increase is appropriate when it’s time for your tenants to renew their lease. You won’t know if rental homes in HOAs are common, or where the best tenants are looking for available properties. Get to know the rental market in Fort Worth. If you are educated about the neighborhood and the tenants who live there, you’ll have a better chance of renting your property quickly and earning more income.
Unprofessional Marketing and Advertising
Marketing is an important part of finding and placing a great tenant. This is your chance to show off your property and inspire people to come and see it. You need to take your marketing efforts seriously. Many landlords make the mistake of posting a generic listing that really doesn’t sell the home or talk about its best features. Or, they don’t do any marketing at all.
Good marketing starts with professional photographs. Go online and look at the listings in Fort Worth. Many of them have beautiful pictures and even videos. Most tenants won’t bother looking at a listing that doesn’t include photos. Before you take your pictures, make sure the property is camera-ready. It should be clean and empty. Don’t take pictures of bathrooms with the toilet seat up. Remove all of the clutter from lawns, kitchens, and closets. Make sure you have good, natural lighting when you take the shots. Open doors and use a wide angle lens so you can really maximize every room.
Don’t skimp on photos. Prospective tenants will want to see a listing that includes pictures of the outside, the yard space (if there is any), the master bedroom, the bathrooms, the kitchen, and the living room. If the bathroom has a garden tub, include a picture of that. Show off fireplaces, walk-in closets, garages, and large, fenced yards.
Once you have your photos, write a description that matches. Don’t make the mistake of leaving out pertinent information. Your ad should state how much rent is, whether you allow pets, and how many bedrooms and bathrooms the property has. Make sure you include your contact information.
Online advertising is really the best way to reach the most tenants. A lot of landlords make the mistake of just putting up a sign. There is still a place for professional, easy-to-read signage, but to really reach large numbers of potential tenants, you need to post online on the most popular rental sites. Try HotPads, Zillow, Rentals.com, Rent.com, and ApartmentHomeLiving.com. Craigslist can be useful, but watch your listing closely. It’s easy for scam artists to steal your information and present your property as their own.
Improper Tenant Screening
Tenant screening is where many of the most common landlord mistakes are made. Either the screening process isn’t rigorous enough, or property owners focus on the wrong things when they’re analyzing credit reports, financial information, and background checks.
First, you need to have a written screening process in place that includes your rental criteria. If you don’t have written criteria in place, you put yourself at risk for screening applicants differently. That can be a fair housing problem. You need standards that every applicant must meet in order to be approved for your property. Put those standards in writing. They might include a minimum credit score, a certain income, and a positive reference from a former landlord.
It’s critical to look at past evictions and whether the applicant owes any money to former landlords or property managers. These things will indicate how reliable the applicant will be as your tenant. When you’re checking credit, don’t worry about overdue student loans or a lot of medical debt. Instead, look at whether the tenant pays their utilities on time and if there are any judgments against the applicant from former landlords. Verify employment and income. It’s a mistake to assume every applicant is telling the truth on every application. Make sure everything checks out.
It’s a major mistake not to contact current and former landlords. This is your best source of information about the tenant. You can ask if they paid rent on time, took care of the property, had any pets, left behind any damage, and gave proper notice. Do a little digging to make sure you’re actually talking to a landlord, and not a family member or a friend.
Deferred Rental Property Maintenance
Every property is going to need maintenance, no matter how new it is or how recently it was renovated. Your Fort Worth investment home will have something break or deteriorate, and you have to be prepared to respond to the problem. Ignoring small problems is a huge mistake that a lot of landlords make because they don’t want to incur the expense of fixing it. Deferred maintenance will actually cost you more in the long term.
When a tenant makes a maintenance request, you have to respond as soon as you can. A slow response to maintenance needs will frustrate your residents, and they’ll end up leaving as soon as their lease term is up (if not sooner). Make sure you’re responsive when it comes to fixing anything that breaks around the property.
Preventative maintenance not only keeps your tenants happy, it also preserves the condition of your home. If there’s a small leak, fix it right away. If you don’t, you’ll only end up with a larger and more expensive problem. Have your HVAC system serviced every year. This will extend the life of the system and give an expert technician the opportunity to make sure it’s running okay. The expense is worth it, and will save you from deferred maintenance costs and headaches.
Another maintenance-related mistake that landlords make is not budgeting for maintenance. If you can save a little of your rent every month in a maintenance reserve account, you won’t be surprised and unprepared when expenses pop up due to maintenance needs. Put together a maintenance budget and track your expenses.
Not Understanding State and Federal Laws
If you don’t know the laws in Fort Worth, in Texas, and in the U.S., you’re almost certainly going to make a mistake. Pay attention to the Fair Housing Act and the Texas Property Code in particular. If you don’t, you could find yourself in legal hot water and facing some pretty heavy fines.
The Fair Housing Act prohibits discrimination against seven protected classes. According to this federal law, as a landlord you are not permitted to deny someone housing based on:
- National Origin
- Familial Status
Most landlords don’t intentionally discriminate. However, the mistakes are made in advertising, poor communication, not understanding the difference between service animals and pets, and inconsistent procedures. For example, you can’t say your Fort Worth one-bedroom apartment is “great for single professionals.” You cannot hold one applicant to higher credit standards than another applicant.
The Texas Property Code requires a number of things from landlords in Texas. Make sure you read it and understand it; otherwise you could make some major mistakes. Start by making sure your exterior doors have keyless deadbolts and peepholes. Change your locks between tenants and install proper smoke detectors.
Avoiding Professional Property Management Help
Trying to do everything yourself is a big mistake. You can benefit from a professional Fort Worth property manager, and save yourself from all of these costly mistakes. Many landlords want to manage on their own because they think they’ll save money on management fees. That may be true, but you have to think about the real cost of not having a professional property manager. Higher vacancy rates, terrible tenants, late rent, potential evictions, legal trouble. There’s a lot that can go wrong. With a professional manager, you’re protected. So are your property and your bottom line.
Remember, your rental property is a business. You have to treat it as such. It’s easy to take things personally and to develop an emotional connection to the property. But, you have to consider every situation from a business standpoint and make decisions that will be best for your investment. A Fort Worth property manager can help you do that.
If you’d like more information or you have any questions, please contact us at Specialized Property Management Fort Worth.