There is plenty of money to be made in Seattle rental property. Many prospective landlords are excited to try their hand at real estate. They anticipate the day when their properties start to make solid returns that enable them to take a luxurious summer vacation by way of their rental property earnings.
While being a landlord can be an exciting and even lucrative endeavor, it is certainly not a simple one. The process of preparing, renting, and managing real estate is one that requires significant time, research, and funds.
Even though there are a variety of property management companies that can help to simplify and ease the burden of managing rental property, many people would rather try it out for themselves. While this may work for a few, many Seattle landowners have ended up paying dearly for making common rental property blunders. Here are a list of 7 common mistakes made by Seattle landlords.
1. Poor Pricing
Many Seattle landlords want to see big returns quickly, so they price their rental property too high. If the price of your rental property can’t compete with surrounding properties, or doesn’t match the budget of your potential tenants, your property will be left sitting empty for months at a time. Landlords should use the market to dictate their pricing and mortgage rates, or else risk losing money over time as their property sits vacant.
2. Underestimate Costs
Inexperienced landlords tend to plan for a limited number of rental property costs. Taxes, insurance, or even mortgage are accounted for, but other unavoidable expenses are simply ignored or overlooked. Regular upkeep and property maintenance, like water and garbage expenses or the replacement of a leaky faucet, are expenses that are rarely factored in appropriately, if at all.
In underestimating their expenses, property owners cannot provide adequately for every-day housing needs and are completely unprepared to handle other larger, unexpected expenses. With the assistance of a Seattle property management company, inexperienced landlords can plan appropriately for costs and expenses and price their property to match the market.
3. Ignorance of Laws
There are several significant tenant and landlord laws that many property owners are generally unaware of. Without current information about the implications of many of these laws, many landlords are found in violation of both state and federal regulations. Failure to comply to these laws can end up costing landlords dearly, so it is recommended that the state and federal legal regulations be adequately researched and understood before beginning to prepare and market property.
4. Poor Tenant Screening
This blunder is among the most common mistakes that give landlords an incredible amount of grief. To ensure that they find great, trustworthy tenants, landlords must invest the time it takes to research and collect information.
Landlords should look into a prospective tenant’s credit record, criminal background, and employment status. A reliable tenant will have documentation of verifiable income. Landlords should also be in conversation with the tenant’s previous and current landlords about the tenant’s track record of payment and behavior. Any information that landlord receives from a prospective tenant should be validated to ensure integrity.
This process can quickly become extensive and exhausting. Many impatient landlords make the mistake of skipping some part of the screen process, and end up paying dearly. One of the great services provided by Seattle property management companies is that they help to match up quality tenants with rental properties. This has enabled homeowners to spend time on more pressing and important matters, while trusting that their rental properties are being properly cared for.
5. Failure to Disclose Information
Washington has several laws that require that certain information be disclosed to prospective tenants by the landlord. Information such as fire protection, fees, and even the presence any indoor mold must be communicated to the tenant prior to signing the lease. Landlords should be aware of this information so that it can be shared with potential tenants.
6. Ignoring Maintenance
In the midst of all the tasks landlords are required to juggle, the presence of minor maintenance issues tends to get overlooked. A landlord’s inclination to ignore the stain on the wall or the leaky pipe can quickly result in larger, more expensive repairs. It is important that landlords find a way to include regular maintenance and inspections into their busy schedule. A Seattle property management company will offer to handle inspections and maintenance issues so that property owners can focus on managing other parts of their real estate.
7. Buying Too Soon
One of the most long-lasting and painful property blunder is to buy a real estate without sufficient information. Landlords must look at the location and ask questions to discern if the property is a wise investment. What kinds of tenants will it attract? Are there major upgrades necessary? Will the revenue generated outweigh the costs of owning and maintaining the property?
Property managers have been able to help tenants gather information, conduct thorough analysis, and decide if properties have sufficient potential to be worth their investment. Landlords that aware of the risks of trying to do it all alone have enjoyed owning successful real estate properties in the Seattle area with the assistance of a local property management company.
At North Pacific Property Management, we offer rental property management services throughout the greater Seattle area to help landlords become successful property owners. For more information or to address any questions, feel free to give us a call or fill out our contact form.