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Mistakes for 2011

January 8, 2012

Last January I posted about the mistakes we made in 2010. We made some more this year so below are some of our mistakes from 2011.

  • Not setting the deposit high enough. I was using a lower deposit than one month’s rent to differentiate my property by lowering the move in costs. I think this just attracts lower class tenants and does not give you enough funds when they damage the property or move with no notice.
  • One check for the rent. We have students in one of our properties and they pay with multiple checks for the various roommates. We are done doing this.
  • Bad Tenant selection.  I chose a couple that could move in on the 21st of a month vs the first of the next month.  So for 9 days rent I went with a couple that turned out to only stay for 4 months.
  • Letting people get away with paying the rent late vs charging them a late fee. Give tenants an inch and they will take a mile. 
  • Stress the importance of 30 day notice when moving out. I had no notice on both of our vacancies this year. When new tenants move in I typically stress that they pay the rent on-time. I am going to add the 30 day notice to my training moments during the move-in speech from now on.
  • Research your contractors. Another lesson learned from my vacancy at Property 5. Just a quick search on BBB or asking for references will always be done from now on.
  • Don’t set your close date on the last Friday of a month. A lesson learned from purchasing our new primary home this year. Title companies are just too busy on that last Friday. Everyone wants to close out deals that day. On future offers instead of just picking the last day of the month for the close date – I will pick a Wednesday or something.
  • Tried to save money on a used appliance from a thrift store. This seemed like a good idea, but trying to save a few bucks here backfired. The real lesson here is to quit supplying appliances at move-in. We are getting out of the appliance business.

Overall – not too bad. That one vacancy that I had due to poor tenant selection accounts for a few of these mistakes and certainly cost me time and money. As usual, I left plenty of room for improvement in 2012.

Related posts:

Mistakes for 2010

 

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From → Landlord

6 Comments
  1. Good comments. Sad to say I am guilty of many of those.

    At least we can learn from some mistakes versus doing nothing.

  2. Not long ago I too was burned by purchasing some overly worn out appliances. I found a washer and dryer on Craigslist that looked okay when I saw them. But, shortly after new tenants moved in, they both gave up the ghost.

    If you stop providing appliances to tenants, won’t you have a smaller pool of potential tenants interested in your properties?

  3. Terry,

    You are correct. I meant I need to stop providing appliances such as washer, dryers, and refridgerators. I feel you must provide the stove/oven and of course a dishwasher if there is a space for one in the cabinets.

    In the next change of tenants, I might even take a couple of garbage disposals out.

  4. I have a different problem with the deposit. I allow set it equal to 1 month’s rent but I have problems when the tenant leave. They give notice when the lease is up but do not pay the last month’s rent. They tell me to keep the deposit, but then I have nothing to cover damages.

    There is not much I can do. They will be gone before I could evict them. I warn them it will be a lease breach, hurt their credit, and they may get a judgment against them but this rarely works.

  5. Don,

    This is tough…not much you can do. You could try and ask for first months rent, last months rent and deposit. But in my area, this would eliminate most of my candidates.

    At least you are getting notice. I had 2 vacancies last year with essentially no notice. Nothing like going to pick up rent and peeking in the window and seeing a vacant house. Even nicer when it happens in January ….Good times….

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