Average mortgage rates climbed above 7%, their highest in nearly five months. Renting out your property is often better than suffering a massive mortgage.
Rental real estate is also a common inheritance. You may receive it but have no idea how to rent it out.
Both situations make you an "accidental landlord." A few tips can turn your properties into income-generating investments.
Read on to learn three mistakes to avoid as an accidental landlord in Dallas, Forth Worth.
1. Poor Tenant Screening and Communication
Every first-time landlord guide will tell you to never avoid tenant background checks. Even the most experienced landlords can make the mistake and end up with dangerous or delinquent tenants.
Look into their:
- Credit history
- Employment history
- Criminal background
- Rental history
- References
Another important piece of rental property advice is to verify these records. False information can easily slip through.
Encourage lease renewals with consistent and clear communication. Explain the rules, provide updates, and give them prior notice before property inspections. It makes them feel valued and like they have a home and not just a place to sleep at night.
2. Legal Mistakes
Take extra care to avoid landlord mistakes that come with fines or criminal penalties. Read up on regulations surrounding the Fair Housing and Fair Credit Reporting Acts, evictions, and security deposits.
Fair Housing laws prevent discrimination against tenants based on:
- Race
- Color
- National origin
- Religion
- Sex
- Family status
- Disability
Judge them equally based on their merits or you could face a lawsuit. The Fair Credit Reporting Act also says what to do when you deny a tenant. Send them an adverse action letter explaining why.
During evictions, file a court order and pay the $121 filing fee. Give them at least three days' notice in advance.
You can only deduct the cost of damage the tenant caused from security deposits, not general wear and tear. You must return them within 30 days after they move out and provide a statement of any deductions.
There are no limits or regulations for storing security deposits in Texas. Keep them similar to other properties and store them in separate accounts.
3. Not Budgeting
Keeping your property in habitable condition is one of your most important landlord responsibilities. Not doing it is a major mistake that's often caused by another mistake; not leaving yourself enough money.
Being an accidental landlord forces you to alter your finances. Make a budget with a detailed breakdown of your income and expenses.
One of the best property management tips is to always leave a buffer for emergencies. It gives you peace of mind about paying for things like burst pipes or natural disasters.
They say it takes money to make money, and not budgeting will lower the return on your investment. If you can't afford maintenance or other essentials like marketing, you won't be able to attract or keep tenants.
Finding Property Management for an Accidental Landlord
Every accidental landlord must screen their tenants, communicate with them, follow the law, and budget for maintenance.
Red Team Real Estate has served the Fort Worth area since 2012. We provide full-service property management for long, mid, and short-term rentals.
Our focus is on working in the best interest of our clients and developing long-term client relationships. Contact us to start that relationship and improve your investment today.
