Real Estate Investor Pitfalls part II

Renting to Tenants...

The biggest mistake a landlord can make is not doing a thorough credit check on the prospective tenant.

Always make sure to do a credit check on any applicant that is interested in your house. Make sound business decisions on who you rent your house to. You will hear every sob story in the book on why you should rent to one individual over another.

Waiting for an individual or family that has decent credit and rent history can save you hours of headaches and hundreds or thousands of dollars. If you don't believe me wait until you have to pay for your first eviction while continuing to make the underlining mortgage loan.

Here are some good tips to follow when renting your property:

Always get a damage deposit. When tenants move out they will do a much better job of getting the house back to move in condition so they can get their deposit back.

A damage deposit should be between one half a month and one months' rent

Take many photos of the property before the tenant moves in that shows the good condition of the property. Show the tenants that you have these photos in your file and that you expect the house to be returned in like condition. Just the fact that they know you have the photos may help them take better care of the property.

Go through the complete rental agreement with the tenants before they move in. Too many times contracts are hurriedly signed on the car hood so you can take the money and get it in the bank.

You schedule a time to go through the contract fully with them even if it takes an hour or so out of your life, most times it will save you countless hours and dollars in later frustrations.

Let your tenants know this is a business you are running and that you expect them to fully follow the agreement.

Make sure they understand you will be collecting late fees if the rent is late. Let them know you expect the property to be treated as if they owned it themselves.

Walk through the property with the tenants before they move in. Have them make note of anything that is in disrepair and write it down.

It is easy to forget details so the more details you have written down the less confusion there will be when the tenant moves out.

The property is your investment, but investing some time in implementing systems for putting your tenants in the property will give you huge rewards in the future, and make your business run much more efficiently in the coming months and years.

Follow these tips and you will be starting your business out on the right foot.