comScore
ADVERTISEMENT
Your browser is not supported. We do our best to optimize our websites to the most current web browsers. Please try another browser.
Skip to main content

Scott McGillivray Reveals the Most Common Mistakes Landlords Make

Scott McGillivray Reveals the Most Common Mistakes Landlords Make

Being a landlord doesn’t mean sitting around and waiting for the cheques to come in. While it might sound relatively easy, owning rental properties and managing tenants is like any other business. You have to plan, do your research and learn from the mistakes of others. Here are a few common mistakes that new, and even seasoned landlords make.

ADVERTISEMENT

Underestimating the Amount of Work
Rental properties do not run themselves. I repeat, rental properties do not run themselves! While a secondary suite in your home can certainly be considered passive income, you still have responsibilities to your tenants. You need to keep the property safe and clean, be available when there’s a problem, and you need to get any issues resolved quickly – whether it’s a broken appliance, or something more significant.

Underestimating Costs
Monthly costs can quickly add up, so you need to understand what they are before you get in over your head. Make sure you calculate everything, from the monthly maintenance costs, to the fixes you might have to do, to the potential profits. Crunch all of the numbers and if at the end you don’t see a plus sign, don’t do it.

Overpricing the Property
Some people try to make up for poor budget planning by pricing the property a little higher than they should. A great idea in theory, but not so much if you can’t find a tenant. A rental unit, like a house that’s for sale, should only be priced as high as the market will bear. If people can find comparable units nearby for less money, why would they choose yours? As a result, yours can sit empty, and the financial consequences can be disastrous.

Read more about Scott’s tips for running vacation rentals.

ADVERTISEMENT

Not Having a Robust Application Form
The idea of an application form is to get as much relevant information as you can so that you feel confident you’re going to have a great tenant. An application form should include:

  • Employment details
  • Salary and banking info
  • References, including names of previous landlords
  • A list of everyone who will be living there
  • Whether the applicants smoke
  • Whether they have pets

Not Checking References
Having people fill out an application form is important. But you know what’s even more important? Following up! Over and over again I hear stories of people who got references and never actually checked them. This is your business and your investment, so take the time to do your due diligence and verify the application details.

Not Welcoming Tenants
Great tenants aren’t found – they’re made. So on move in day be sure to welcome your new tenants with some sort of welcome gift. It could be a bottle of wine, a gift card for a home decor store, or a welcome basket with some essentials. It doesn’t have to be grand or expensive, just a little something to set the right tone for the relationship.

Not Getting Things in Writing
Any good business owner knows that you need to have things in writing. Even if you’re renting to a friend or family member, I highly recommend having them sign a lease that details all the rules regarding the unit, the property and payment. Remember that this is a business and you must protect your investment at all times. A handshake deal is not enough.

Not Communicating
A landlord who wants to have happy tenants who pay on time needs to be a good communicator. Not only does this mean keeping your tenants informed of what’s going on with the property and the unit on a regular basis, but also answering their calls and emails when they come in – even if they feel unimportant or unnecessary. A tenant who feels ignored can quickly become difficult to deal with – and that’s the last thing you want.

Click for Scott’s tips on how to deal with nightmare tenants.

ADVERTISEMENT

By avoiding these common mistakes, you’ll be on the right path to running a successful income property!

Feature image courtesy of Credit Skit Inc.



Latest News

Why do we light candles over eight significant nights?
November 26, 2024
What are Canada’s best and worst cities for prospective homebuyers to save for a home? We asked the experts.
November 25, 2024
'Tis the season for holiday activity parties! Here's a simple how-to on how to plan a fun one.
November 22, 2024
Looking to buy your first home? Here are the new rules you should be aware of.
November 21, 2024
The team overhauls a bland backyard for an artist in beautiful Bay Roberts.
November 19, 2024
Here is everything you need to know about Amazon's big event (and early deals to check out right now!).
November 19, 2024
Unwashed pillows are hotbeds of mites, bacteria, fungi and more — here's how to keep your sleep environment clean.
November 19, 2024
These cloud couch dupes will fit any space without breaking the bank.
November 18, 2024
Where do Canadians live the longest? Find out which province tops the ranking.
November 15, 2024
ADVERTISEMENT
ADVERTISEMENT
This content is restricted to adults of legal age.
Please enter your birthdate to confirm.
Date of Birth