Homes in Florida provide excellent investment opportunities and boast benefits for homeowners and renters alike. Embarking on an Orlando property management venture is very exciting, though many investment owners worry about the potential risks of owning a rental home in Orlando. Taking a 'do it yourself approach to being a landlord has its benefits but is also time-consuming and stressful. Researching Orlando's best areas to invest in provides insight on the best homes to buy to get the most for your money. Careful considerations are also needed when managing your rental home. This list details some common DIY landlord mistakes that can cause home damage, lost profits, and frustrated tenants and homeowners.
1. Improper tenant screening
As a homeowner, it's only natural to be anxious to secure tenants for your property right away. However, it's essential to run prospective tenants through proper screening techniques before moving them in. Checking rental history and references is a great place to start. Failing to properly screen tenants may cause significant damage to your property and lost rent if the tenants cannot pay. An effective Orlando property management company properly screens applicants for a property within all legal avenues and selects the best-qualified applicant to rent the home. The top aspects an expert property manager screens for are:
- Credit and rental history
- Background checks
- Income information
- Pet records on animals living in the home
2. Setting the Wrong Rental Rate
Deciding on the rent of your home elicits a delicate balance. If you set the rent too high, you drive away prospective renters. Setting the rent too low may cause you to lose money on your investment and be unable to keep up with maintenance costs. The home's location is also a critical factor in deciding on the rental rate. Residences in Orlando have different rental rates than homes in Clermont, for example. Completing a market analysis is an excellent place to start when determining the rental rate. An expert property manager performs the market analysis and helps you find that "sweet spot" for your rental rate to draw in tenants and generate an income.
3. Performing Unqualified Maintenance
Maintenance on a rental property can become one of the highest costs a homeowner endures while renting their property. It may be tempting to perform maintenance yourself to save money, but this could end up costing significant expenses down the line. Finding a qualified maintenance worker is imperative in maximizing your investment in a rental home. Failing to do so could result in minor maintenance issues becoming more severe over time and causing damage to the house. A landlord failing to fix maintenance issues could also be liable for the tenants' lawsuits if the maintenance issue leads to an unsafe living condition. The best Orlando property management companies have a lineup of certified, professional maintenance workers ready to take the best care of your rental home. Using the proper maintenance personnel keeps your home functions running smoothly and your tenants happy.
4. Having Unrealistic Financial Expectations
New landlords carry a common misconception that they will start making lots of extra income when their house is rented. This is not always the case. It is essential to adjust your expectations for revenue to a reasonable level. When first renting your home, the generated money should be saved for future maintenance and vacancy expenses. A good property management company can help guide you with what to expect when you first start.
New landlords may also have unrealistic expectations for when the home is going to be leased. Not every home rents immediately, and it is helpful to know what vacancy periods are in the realm of normalcy. Once a home starts falling into abnormal vacancy periods, it's time to look at what may be causing this. Is the rent too high? Does the house need maintenance or updates? Your expert property manager helps analyze the home's attractiveness and adjust accordingly to make it more appealing to tenants.
Utilizing landlord insurance can also help mitigate unrealistic financial expectations. Landlord protection insurance covers loss of rent, eviction costs, malicious damages, and 3rd party conditions reports. These features help bring peace of mind by allowing homeowners to avoid extreme loss of income. Besides purchasing landlord protection insurance, the best course of action to maximize your investment is choosing the right property management company.
5. Not Hiring a Property Management Company
Owning an investment home can be very rewarding but may also cause stress and loss of income. This is especially likely if done on your own. Hiring a property management company to help take care of your investment home is a wise decision to lessen the landlord burden, decrease stress, and increase profits. Choosing the right investment home is almost as important as choosing the right Orlando property management company. Call us today for your best ally in owning an investment home!