While renting out a Charleston property can be a great way to generate consistent, recurring income every month and finance additional investments, it is also easy to make mistakes. You’ll need to prepare for potential issues that may arise throughout the process, especially if you’re a homeowner who is renting out a property for the first time.
As experienced landlords will tell you, leasing, managing, and maintaining a rental home is not always as easy as it seems. Mistakes can easily be made if due care isn’t taken, and those mistakes can be both expensive and difficult to recover from. Whether it’s inadequate tenant screening or slow maintenance responses or legal missteps, even a simple mistake can have dire consequences for your property and your success as a landlord.
Let’s take a look at some of the main mistakes homeowners are likely to make when renting out their property.
Change Your Insurance Policies
As you transition from homeowner to landlord, you need to update your insurance.
It’s a huge mistake to keep your homeowner’s policy that’s currently in place; a claim might not be covered. The landlord policy operates similarly to a homeowner’s policy, but there are details that separate the two.
Talk to your insurance agent and make sure you have enough coverage as a landlord. You’ll want more liability protection and extra insurance against things like loss of rent. Your tenant’s belongings won’t be covered under your new landlord insurance, so we strongly advise you to require renter’s insurance.
Emotional vs. Business Relationships to the Property
Once you decide to rent out your property, you need to treat the property like a business.
All of your decisions have to be business-based and not emotionally driven. This is essential if you want to effectively rent out your home, and it’s a mistake to continue thinking about it as your own home. It’s not. Make sure you can disconnect from the property emotionally.
Focus on the income the investment will provide. Be objective and professional and work with a professional Charleston property manager so there’s some distance between you and the tenant and you and the property.
Avoid Incorrect Pricing
Your property’s rental value will depend largely on the market, and a lot of homeowners make the mistake of ignoring the market and pricing their home according to what they think the home is worth or what they want to earn.
Pricing your property too low means leaving money on the table. Pricing your property too high means a longer vacancy period. You’ll struggle to find someone willing to rent your home at a price that’s too high, and you may find yourself losing an entire month’s rent before you lower your asking price and find a tenant.
Take a look at what homes similar to yours are renting for in your neighborhood. Price your home competitively to avoid those long vacancies.
Inadequate Tenant Screening in Charleston
Tenant screening is one of the most important things you’ll do as a landlord. Your rental experience depends on placing a qualified tenant who pays rent on time, helps you take care of the property, and follows the terms of the lease agreement.
You need a thorough and consistent screening process that does not violate any fair housing laws. Establish standard rental criteria and document your process.
- Check national eviction and criminal databases
- Look at credit reports.
- Verify income.
- Check rental references
Don’t skip tenant screening. Be thorough and get some help online or from professional Charleston property managers if you don’t have the necessary resources.
Deferred Maintenance in Charleston Rental Homes is a Mistake
Deferred maintenance will cause your home to deteriorate. It will also frustrate your tenants.
Deferred maintenance describes any repairs that you put off because you don’t want to spend the money or take on the work as soon as it was needed. It’s a mistake because it only leads to larger and more expensive maintenance issues.
There’s also the danger of unreported maintenance, which is when your tenants do not immediately report that something is wrong at your rental property.
If you put off repairs because you don’t have the money, it’s a mistake. If you lead your tenants to believe that you don’t want to be bothered when repairs are needed, you’re making a big mistake.
Unless you’re responsive about maintenance, the repairs you’re called upon to make will always be more expensive. Think about that slow leak under a sink that you’re in no hurry to fix. If it becomes a major plumbing disaster, you’re not only looking at the cost to remove and remediate the water damage, you’re also putting your property at risk for collecting mold.
Deferred and unreported maintenance are costly mistakes. You can protect yourself and your property against this by:
- Explaining to your residents that it’s important they report repair needs right away. Help your tenants to understand that everything should be documented and reported, even if it’s a small issue.
- Conducting thorough, well-documented inspections during the move-in and move-out process. A maintenance walk through during the tenancy is also a good idea.
- Putting together a preventative maintenance plan so you can have all of your major systems and functions inspected and serviced. Have the heating and cooling system inspected and serviced annually. Get the roof and the gutters cleaned annually. Hire a pest control service to do routine treatments.
Responsive maintenance can help you avoid the mistake of deferred maintenance. It also saves you a lot of money.
One of the biggest mistakes homeowners will make is trying to do everything on their own.
Partner with a Charleston property management company. You’ll save yourself a lot of time and frustration, and you’ll find you aren’t making these common mistakes that so many new landlords do make.
We can help you get started. Contact us at Meridian Residential Group.
Meridian Residential Group in North Charleston provides both single-family and multi-family property management in the Charleston, SC area, including in North Charleston, Summerville, Goose Creek, and Moncks Corner, among other cities.