Key takeaway

Resident screening is critical to long-term success
Rushing to fill vacancies without a proper vetting process often leads to legal issues, late payments, and high turnover. A thorough screening system protects your investment.
Understanding landlord-tenant laws prevents costly mistakes
Federal, state, and local laws govern everything from habitability to evictions. Staying informed helps landlords avoid lawsuits, fines, and lease disputes.
Proactive maintenance saves money and retains residents
Addressing repairs early prevents small issues from becoming expensive problems while improving resident satisfaction and lease renewals.
Accurate cash flow forecasting protects your profitability
Factoring in all operating expenses and setting market-appropriate rent ensures your rental property remains a profitable investment rather than a financial burden.

Being a landlord can be anything but easy, especially when starting out with no prior experience. You may not know, for instance, how to choose the right kind of residents, determine the optimal rent amount, or respond to repair issues.

As a result, landlording can feel stressful and daunting. However, it doesn’t have to once you have the right knowledge at the get-go.

In this post by SGI Property Management Phoenix, you’ll learn X mistakes to avoid making at the beginning of your landlording journey.

What Experienced Investors Regret Not Doing Early

As a landlord, you’re bound to encounter certain challenges in your property management journey. Here are some of them, and how you can tackle them early on to be successful.

Not Choosing Residents Wisely

This is one mistake that far too many landlords make when beginning their investment journey. Some are desperate to fill vacancies quickly for some immediate profits. Whereas others are plainly ignorant of the proper process to take to choose residents.

Resultantly, this often leads to legal issues due to fair housing law violations, or potentially difficult residents.

To choose the right kind of resident for your rental investment, you need to have a thorough vetting process. The process should qualify prospective residents based on some criteria. Including, their credit rating, employment status, criminal background, and rental background.

With such a process in place, you can rest assured of landing a resident who meets the following qualities.

Pays rent on time.
Cares for the property by reporting issues on time.

Abides by all terms of the lease.
Renews their lease multiple times.

Not Being Educated on Applicable Law

As a landlord, you have certain legal responsibilities under federal, state, and local laws. Under the Arizona landlord-tenant act, for instance, the following are the regulations you must follow.

Abide by the applicable fair housing laws.
Abide by security deposit laws if charging residents’ security deposits.
Abide by the habitability laws, including making requested repairs within 2 days after getting notified.
Following the proper eviction process when removing a resident from their rented premises.

Violating any of these laws can have harsh consequences. If you fail, for example, to make the necessary repairs within the notice period, the resident may sue for the costs. They may also cancel the lease agreement without penalty, or make the repairs themselves and deduct from future rent.

Not Understanding Residents’ Needs

This can be a serious issue that can negatively impact your landlording success.

Property management is in the customer service industry. Therefore, as a landlord, you should strive for great customer service for repeat business. But, what exactly does this mean for you as a landlord?

To provide the resident with a great experience, the following are some of the things you may want to do.

Respond to their repairs and maintenance issues with the required urgency.
Provide them with the amenities they want. For instance, in-unit laundry, air conditioning, high-speed internet, smart home tech, and a dishwasher.

Ability to personalize their home to meet their needs. If you have a high-quality resident in place, you may want to allow them to personalize their living spaces for optimal comfort.

Not Handling Repairs and Maintenance Issues Proactively

If you fail to handle your property’s upkeep well, several things can go wrong. For one, you may experience high resident turnover, as high-quality residents will feel not cared for or respected.

Two, small issues can morph to become serious and costly repairs and maintenance problems.

And three, your rental property may fail to meet the requisite safety, health, and building codes. When this happens, you may have to first fix all the underlying issues before you can rent it out.

Not Accurately Forecasting Cash Flow

Before renting out your property, first understand how much profit you should expect. If you fail to do so, you may risk running a money pit investment.

To determine your property’s cash flow, first understand the expenses you’ll incur running the property. Examples of common expenses include repairs, maintenance, accounting costs, vacancy costs, marketing costs, and property management fees.

Next, figure out how much rent you’ll be charging residents. This will require you to carry out a comparative market analysis.

Finally, subtract the operational costs from the projected rental income. This should tell you how much return on investment (ROI) you can expect from the investment.

Conclusion

There you go. Things that experienced investors regret not doing early. Avoid the same mistakes for a profitable investment journey. Ideally, consider working with a reliable and professional property management company.

SGI Property Management Phoenix can sort out all your property management worries. From property marketing, to resident screening, to rent collection, and everything in between, you can trust us with your property management needs in Phoenix, AZ. Get in touch to learn more!