11 Common Mistakes Made By Rental House Owners

The following represents my personal opinions based on 40 years of experience owning, renovation, brokering and managing residential income property.  I have rented to thousands of tenants and have managed for hundreds of owners in addition to my own properties.  I hope the following will help you avoid the mistakes that cost you time and money.

  1. Picking the wrong tenant
  2. Not providing a quality product
  3. Not asking the right rent
  4. Bad pet policy
  5. Asking for too many deposits
  6. Providing too many appliances
  7. Not doing periodic rent increases
  8. Allowing tenants to do their own repairs
  9. Not dealing with chronic late payers
  10. Not doing periodic inspections
  11. Not making timely repairs

1. Picking The Wrong Tenant

“I trust my gut”. Sound familiar. Your “gut” can tell you a lot but not everything. There are some really great actors out there. If your first impressions are good engage them in conversation. Why are you moving? Did you get along with your last landlord? How is your credit? If they say their credit is okay ask them what’s on their credit report.

A FICO credit score under 660 indicates there may be a problem. Verify their employment and income with pay stubs. No stubs…ask for bank statements and/or tax returns. Contact their last two landlords. Note, their current landlord may be very anxious to get rid of them. They should have a gross income of about 21/2 to 3 times the rent. Maybe more if there’s lots of debt such as student loans, credit cards, auto loans, etc.

If they have a complicated story and expect you to sort out the truth you should probably take a pass. For example, if they say the items on their credit report are a mistake and they are in the process of cleaning it up tell them to come back after it’s cleaned up.

Don’t take shortcuts here. This is your most important job. Making a quick decision and not checking them out thoroughly could get you the “tenant from hell”.

2. Not Providing A Quality Product

Your rental should have good curb appeal, should be extremely clean and everything should work and be in good repair. A fresh paint job always a good idea, nice carpet or vinyl floor planking, and nice mini blinds. This is an easy call. If the house is rough, expect your applicants to be rough. Ask yourself, “would I rent this place”?

3. Not Asking The Right Rent

Some people believe that asking a high rent will weed out the undesirables. Quite the opposite. Bad tenants will sign a lease and pay the high rent for a month or two. Then the excuses start.

Figure out the going rate. Check neighboring houses. Check out Zillow. Zillow estimates are based on neighborhood and square footage. You will have to adjust their estimate for amenities. If you have fewer then you will get lower rent. If you have more, higher rent.

You’ll have to figure out the rental demand in your area. Lots of vacancies means you may have to set a rent slightly under the market. If demand is very strong you can test the market.

If you’re not getting calls something’s wrong. Poor curb appeal or maybe rent is too high. Don’t be stubborn, fix the problem. You will never recover lost rent due to a long vacancy. It’s better to be a little under the market. If you do end up renting at the higher rent sooner or later the tenant may figure it out and move for a better deal.

Don’t be greedy.

4. Bad Pet Policy

Almost everyone has a pet these days, especially house renters. Advertising “no pets” just eliminated 60% to 70% of your potential tenants. Then you finally get a tenant and they either get a pet anyway or the tell you they have a “service dog” and you can’t turn them down legally.

You will get a better rent by taking an animal. If you’re worried take a larger deposit.

In my many years in this business I have learned that a good tenant almost always brings a good pet situation. I take cats in all units and dogs when there is a yard.

5. Asking For Too Many Deposits

First and last plus a security deposit, a pet deposit, a key deposit. My goodness. Again, you just eliminated some really good tenants. Your best security, your best insurance, is finding the right tenant, not asking for a huge move in cost. We ask first month’s rent plus a security deposit equal to one month’s rent.

6. Providing Too Many Appliances

Tenants will take good care of the appliances they own. It’s human nature.

Many people who rent houses already have refrigerators, washers and dryers so if you provide them you’ll have to store them. If tenants end up buying appliances I believe they will be more apt to stay longer because they have a greater investment.

Also, repairing and replacing appliances can be very expensive. Stay out of the appliance business. It has worked well for us.

7. Not Doing Periodic Rent Increases

If you are experiencing a weak rental market rent increases are not an option. Under normal circumstances it’s probably a good idea not to raise rents the first year. However, after that we recommend modest annual rent raises. The tenants will expect these and will accept reasonable increases.

We believe that a quality long-term tenant deserves a break on the rent. A vacancy can cost thousands so keep this in mind when considering rent increases.

Keep up on rents in the area and don’t let your rent get too far from market.

8. Allowing Tenants To Do Their Own Repairs

It may be very tempting. It would be so convenient. The tenant swears he or she can do this…no big deal. Do not, I repeat, do not let a tenant do any repairs. They are not licensed or insured. If they do a repair that results in damages to property or injuries to persons you are liable. When you authorize them to do a job for you, they become your agent and you are responsible for the actions of your agent.

They may be disappointed with your decision but they will respect your professionalism.

9. Not Dealing With Late Rent Payers

Nothing wrong with accepting a late rent when, on occasion, something unanticipated happens. You should always make it clear to the late rent payer that it is not a problem as long as it does not become a habit and be sure to tell them that you expect them to contact you early in the month that the rent will be late, the reason for the late rent and when will rent be paid in full.

I guarantee that if you accept late rent without a response, late rent will become a habit and it will get later and later as time goes by.

A late fee can be useful in discouraging late rent.

10. Not Doing Periodic Inspections

You should to a drive-by inspection every few months at least. Unless there is an issue do an interior and exterior inspection once a year. Tell your tenants you want to make sure smoke detectors are working which the law requires and you want to identify any needed repairs. This affords the tenants the opportunity to identify any problems they’re having. 

The tenants will be reluctant to let the property go if they know you be there once a year. This is something we do for all our managed properties.

11. Not Making Timely Repairs

The most common tenant complaint (see YELP) is landlords not taking care of repairs in a timely manner. Some don’t address them at all. Your tenant is a valued customer and should be treated accordingly. If not, they won’t stay and these days they’ll report you on social media.

If a repair is needed it doesn’t cost any more to do the repair today than it would cost in a week or two. We address needed repairs the day it’s reported. Tenants love this level of service, tend to stay longer, tell their friends, and make positive reports on social media (YELP and GOOGLE).

Rental property ownership is a business. If you are going to be in business, take care of business.


I hope you found this helpful.  Email me if you have questions.  I’ll try to help.

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