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10 Common Mistakes

1. Failing to properly screen applications for credit, rental references, and income.

Owning residential rentals means being in business and the day to day operation should be run professionally. A car dealership would never allow a customer to drive off in a new $50,000.00 Mercedes car without first running a complete credit and background check. Yet I have seen property owners turn over a $100,000.00 home to a family that had negative credit and without checking out rental references. Why gamble in the management of YOUR business? Proper screening involves having written standards that are both strict and reasonable and the following through on checking to see that those standards are met. Not strict enough, you will end up with a problem later, too tough will not allow you to rent the property in a reasonable amount of time. Be certain to also verify the identity of your applicants prior to releasing possession.

2. Failing to have a written agreement covering potential problems and concerns.

If you don't put it in writing, who will determine what the rules are? A written Rental agreement is your chance to memorialize all your requirements and to verify that all of your legal requirements have been met. Avoid a dispute later by having all potential problem areas covered in writing.

3. Not enforcing late rent policies.

As soon as you determine that the rent is past due, you should confront the tenant and find out what the problem is. It is unthinkable that they have forgotten to pay, so something is going on and it must be addressed immediately. As soon as you can, get a 5-day notice served so that you are in control of the situation. The story may be believable, but you must be prepared to proceed if the promise to pay is not kept. Finally, don't hesitate to start an eviction with an attorney that knows how to do unlawful detainers. This is a specialty that requires professional expertise to make it go quickly and to your best advantage. Always be prepared to enter into a stipulation that provides for a payment plan and/or move out plan. This is preferable to the alternative of a court trial.

4. Not inspecting your property on an annual basis and automatically replacing smoke alarm batteries and filters.

An annual inspection will protect you and your resident from safety and financial liabilities. Since some residents remove smoke alarm batteries, this is a chance to verify that the alarm is both working properly and that it is placed in the proper location. Also, many residents do not faithfully change their air conditioner and heater filters. The annual inspection will reveal this and give you a chance to change the filter before your AC unit gets damaged. The annual inspection will also allow you a chance to catch any lease violations and deferred maintenance.

5. Entering a property without proper reason or notice.

Whether you are attempting to perform an annual inspection, conduct a repair, or arrange for a prospective purchaser to see the interior of you rental, you must give proper notice to your resident. This notice must be 24 hours in advance. In an emergency only, the landlord may enter without 24 hours notice.

6. Not using the advice of an eviction attorney when dealing with a non paying tenant.

It is simply not a good idea to try to handle an eviction yourself. There are too many knowledgeable tenants and too many attorneys willing to give advice to those tenants for you to try an eviction case by yourself.

7. Have a check-in condition report signed.

This could be simple or done with photographs or a video camera.

8. Restrict pets and use a pet agreement.

Collect extra deposits but don't tie the extra deposit to the pet.

9. House Rules.

Cover the use of automobiles, disturbing noises, installation of television antennas or satellite dishes, barbecuing, etc. on the property.

10. Notify the resident you have re-keyed the property.