3 Risks That Come With Being A Private Landlord
Posted on: 5 April 2016
If you recently purchased some property, and you want to rent that property out, you have to decide if you want to manage the property as a private landlord or allow a property management company to take care of the rental for you. Here are a few of the risks that come with being a private landlords.
#1 Bad Tenants Sometimes Seek Out Private Landlords
Bad tenants who have poor recommendations or spotty job histories often look for private rental listings where they will deal with a private landlord instead of properties listed through a property management company. Bad tenant target private landlords because they know that you most likely do not have the same extensive screening resources or experience that a large company has.
If you choose to be a private landlord, make sure that you do not skimp out on the screening process. Check and make sure that a potential tenant is employed at the place they list on their application. Call and talk with all previous landlords. Look into their credit score as well as their criminal history. Do not allow yourself to fall for someone who seems charming but whose application does not add up; bad tenants are counting on that.
#2 Tenants Who Engage In Illegal Activities Gravitate Towards Private Landlords
Potential tenants who want to engage in illegal activities also target private landlords. They target private landlords because they know that most private landlords do not inspect their properties with the same regularity that property management companies do.
Make it well known when you are interviewing tenants that you will perform seasonal inspections on your property. Potential tenants who engage in illegal activity may be hard to spot, but you can deter them by making it known that you do inspect your properties on a regular basis.
#3 You Have To Deal With Non-Payments On Your Own
Another risk of being a private landlord is that you have to collect rent and deal with non-payment of rent on your own. That means that you are the one responsible for sending out reminder notices when a tenant fails to pay their rent on time and for levying fees for late payment. It also means that you are responsible for the eviction process is a tenant fails to pay for an extended period of time.
Being in charge of these aspects means that you need to understand where you stand legally if a tenant fails to pay. It also means you need to stay on top of implementing the rules and penalties associated with late payment in your rental agreement.
Being a private landlord comes with risks; you have to screen your tenants on your own and avoid the bad tenants that seem to seek out private landlords. You also have to collect payment and deal with the consequences of non-payment on your own. You can avoid some of these risks by being vigilant about the screening process and learning your rights as a landlord; you can also avoid these risks by turning over management of your rental to a property maintenance company such as Shook & Tarlton Rentals.Share