Most landlords and investors get started in real estate because they are looking for alternative ways to invest their hard earned money. The idea of investing in real estate and owning a large portfolio of rental properties can be very enticing but the dream of building a second stream of income or a retirement nest egg can quickly become a nightmare because of these 3 common mistakes landlords make when buying rental properties.
Buying a rental property because the price is low
This is the biggest mistake most landlords make when buying rental properties. They assume that because the purchase price is low they are getting a great deal on an investment property. The problem here is that they did not consider the neighbourhood, the amenities and the type of tenants this potential property will attract. The saving made when the property was purchased will be diminished due to high renovation costs from damages caused by the tenants, high maintenance costs from property wear and tear and potential lost revenue due to long vacancy periods.
Not screening tenants properly
In today’s economy it is almost impossible to qualify for a loan, purchase a car or purchase a rental property without a lengthy application and screening process. Landlords need to treat their rental properties and tenant selection in the same way. Not screening tenants can cost you thousands of dollars in repairs, lost revenue and legal battles to evict a problem tenant. When screening tenants it is important to check their credit, employment history and follow up with at least 3 character references.
Leaving it all up to the property manager
As your rental business starts to grow enlisting the help of a property manager or Management Company is important in order to sustain the growth of your rental portfolio. The mistake most landlords make here is trusting that the property manager will run their rental business the same way they do. Even though your rental portfolio is being managed by a professional property manager it is important to maintain good communication and oversight with the property manager to ensure proper tenant screening, maintenance and repairs are being taken care of and vacancies are being filled.
Avoiding these 3 mistakes can make a very big difference to your bottom line and the amount of stress a experienced when owning rental properties. If you are a landlord and you are tired of dealing with problem tenants, vacancies or the stress of managing a large portfolio we would like to hear from you. The We Buy Houses Winnipeg team specializes in buying investment properties throughout Winnipeg in any shape and all conditions. Let us help you find a solution to your real estate problems.