- Buying in the wrong area There’s a lot more to identifying a good rental property than the price! You need to take a close look at the neighborhood and surroundings, schools, places of employment, those factors are extremely important! Would you live there? If the answer is NO, then don’t buy it. I don’t care if they’re giving the rental property away for FREE if it doesn’t meet all of your criteria, then PASS.
- Buying “fixers” Everyone talks about buying a “fixer” because you can get a good deal but it’s not a good deal if you have to drop 50k in it just to make it livable. And don’t fool yourself, rehabs add up faster than you can blink! And it’s all the little items that add up to big bucks. Know exactly how much you will need to spend on rehab before buying the property! Renttoday.us has a sister company called Fixd Construction that can give you a complimentary bid on any potential investment you decide to buy.
- Buying rental properties your wallet can’t handle Don’t buy things you can’t afford! There’s nothing worse than dealing with an investor who’s in over his head because he wants to be a big shot and buy up properties. They have no money for repairs, they want to overprice the home, and they stress each day it’s vacant. These are all the signs of someone who should NOT be in the rental biz. If a few months of vacancy, and eviction, or any other expense is going to put you over the edge financially…then you need to start with something much smaller and less risky
- Doing your own improvements It doesn’t matter if you have the time and unless you are a professional please just let someone else take care of it. Preferably, the fine and skilled folks over at Renttoday who will give you a screamin’ deal and you can be assured of the quality and completion. I can’t tell you how many insanely bad rehabs I’ve seen done by the hands of thrifty investors trying to save a buck. I actually had a guy brag that he redid his whole kitchen for under $100…needless to say, the place was hideous and it never rented and he wondered why…go figure!
- Getting fixated on a rental price This is just simple business math that many investors fail to comprehend. Some people get an arbitrary number in their head and think they’re being prudent by refusing to negotiate! Please don’t be that guy. Your friendly and knowledgeable Renttoday account exec will give you comps based on fact not fiction….please listen to what he says and take our advice. We do this every single day.
- Punishing your future tenant for the sins of your last If I had a dollar for every investor who complained about their last tenant and now every tenant going forward has hell to pay! The fact that your last tenant trashed the place has nothing to do with this new tenant and therefore needs to be treated appropriately and fairly. If not, you could be violating Fair Housing laws. The rent doesn’t get higher or the deposit bigger just because you had to fork out money for new carpet, etc. from the last tenant.
- DIY – Self Management Kind of like rehab or repairs…you gotta leave the management to the pros! Believe it or not, property management is an art, an actual profession, and there’s A LOT you need to know. Especially in the Golden State of California, we got more regulations, guidelines, and laws than you can shake a stick at! We have attorneys on call and are familiar with all the laws we need to know when dealing with tenant/landlord relations.
- Micromanaging Your Property Manager Please let the company you hire to manage your property actually manage your property. Hopefully, you hired Renttoday and you hired us for a reason…because you think we know what we’re doing and you happen to be right! Please don’t “help” us by placing your own rental ads, hosting your own Open Houses, etc.….it’s a recipe for disaster not to mention a waste of time, trust us! If you hire a manager, allow them to manage, be united in decisions, and listen to the advice.
- Performing Your Own Evictions Eviction is a legal process that you should leave to the folks who do it every day for a living. It’s not a terribly complicated process but there are some tricky details that can blow weeks of work if you don’t know what you’re doing. A typical eviction costs $1395 from start to finish, just know and prepare for that from the beginning and you’ll be much better off. And don’t be fooled by those “Fast Eviction” companies who only charge $600….that mainly just covers the filings and has nothing to do with representing you in court, sheriff lock outs, etc.. Renttoday has a complete Eviction Package that your friendly account exec will be happy to go over with you.
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November 16th, 2009 at 8:19 pm
This is both helpful and funny information! I like your style.