Buying a rental property in Irvine, CA, demands a significant investment of time and money, and any mistakes or erroneous decisions can result in severe financial and mental distress. While we often talk about things you should do to build a successful rental business, in this article, we’d like to reflect upon things you must avoid with your rental property.
As seasoned property managers in Irvine, we know where self-managing landlords go wrong with their business and would like to take you through some of the most common mistakes that landlords typically make. It may help you take steps to avoid them or talk to a professional property management company as needed.
Improperly Pricing The Irvine Rental
This is one of the most common landlord mistakes to avoid, as it can affect your ROI in multiple ways. If you set an unreasonably high rental price, your home might experience longer vacancies. On the other hand, if you set an extremely low rent price, you may not be able to cover the repairs and maintenance costs and eventually won’t get the desired cash flow.
To avoid this, we suggest you hire a professional property manager. They can provide you with an accurate rental analysis by studying the average rent charged in your locality combined with other market trends, the condition of your property, and the amenities in your rental.
Landlords may start to neglect the maintenance of their property when they find long-term tenants. They miss out the routine inspections and maintenance, leading to problems like early deterioration of property, severe damages, breach of lease terms, and theft, among other problems. Remember, your rental investment is your business, and the property is the product. So, do all that you can to keep it in the best possible condition at every stage.
Not Abiding By The Law
As a landlord, abiding by state and federal laws is your prime responsibility. If you fail to comply with the Fair Housing Laws, the rent control rules, and don’t provide a habitable home, you might break the law and invite hefty legal penalties drawing hundreds or thousands of dollars from your account. For serious matters like security deposit issues or safety issues, the tenants may even sue you in the small claims court.
Creating An Ambiguous Lease Agreement
Not creating a proper lease could give you a tough time handling your rental business. Your lease must clearly define the tenant’s responsibilities and your expectations from the renters. It should also include crucial pieces of information like disclosures, the early termination clause, the eviction process, and specific policies if any. Failing to mention these in the agreement can leave scope for misinterpretation and increase the chances of tenant-caused property damages.
Failing To Screen The Irvine Tenants Effectively
Superficial tenant screening is yet another common landlord mistake that can lead you to place bad tenants. For instance, if you don’t check their credit reports or income stability well, you might place financially unstable tenants who fail to pay rent on time. Similarly, not checking their rental history or past evictions could leave you with tenants who cause damage to your property or move out early. Worst case scenario, if you don’t check their criminal background, you could place tenants who are a threat to yourself, the property, and the neighbors.
You are more likely to make mistakes when managing your Irvine rental independently. Hence, we recommend you work with professional property managers. They are skilled and carry out crucial tasks like screening tenants or efficiently creating leases.
Work with the most trusted property management company in California, HCM Property Management. We have been in the real estate business for decades and know how to protect landlords from making management mistakes.
For more information, contact us at HCM Property Management.