Editor's Note: This article was originally published by Rentec Direct.
Real estate can be one of the most profitable and secure investments for individuals who do their research and put energy into efficiently managing their properties.
I bought my first property when I was 21 and officially entered the investment game when I purchased my second property a few years later. As my investment portfolio grew, I spent a ton of time talking to other investors, managers, and experienced landlords, attending REI meetings, and reading as much information as possible. I wanted to find out every good and bad situation that could potentially happen during my future as a real estate investor.
It has now been more than 10 years since I first called myself an investor, and there are a few things I learned along the way that I wish I had known in those first few years. Thankfully, I have never had to evict a tenant (thanks to extremely thorough tenant screening best practices) and the rental market has remained competitive enough for my longest vacancy to only be 1 month. While I have been fortunate enough to have a successful rental management history, here are some of the most surprising and important things I learned about owning rental property along they way.
20 Things I Wish I Knew Before Investing in Real Estate
1. I can’t just change the locks on a renter who didn’t pay his rent.
2. If a renter doesn’t pay rent, it can take up to 12 weeks before the property is actually vacant if I have to evict him.
3. I can’t make any money or profit on a security deposit.
5. Renters don’t care that there has been a leak under the sink for 6 months. They might finally report it when the floor starts crumbling though.
6. If I don’t return the security deposit funds back to my renter with a designated timeline, I could end up owning my renter money (even if he damaged my property!).
9. I have to constantly Google myself to find out what my disgruntled renters are saying about me.
10. My renters will complain when I show up to do routine inspections, even though it’s clearly stated in the lease they signed.
11. Even though rent is due on the 1st, since I allow a 5 day grace period, I will ALWAYS get paid on the 5th.
12. There is software for managing rentals that lets me do everything online. Start now, so you don’t have to later.
13. Renters lie, even the nice ones. Credit reports don’t.
14. A roof really can cost $15,000 to replace?
15. I seriously have to re-paint the house every 10 years, and it costs $3,000!?
16. Spending a hundred dollars a year to clean my gutters can actually save me thousands in water damage.
17. I’m limited by my state on how much I can collect in late fees. Usually it’s less than 5% of the rent.
18. Checking prior landlord references is super important, because a tenant might have been kicked out, but not officially evicted so it won’t show up on an eviction report.
19. As a landlord, I’m allowed to pull credit, criminal, and eviction reports on all the applicants. And I don’t have to pay for it, the renter does.
20. If I enter the rental without proper notice, I might owe my tenant a free month’s rent. Twelve unannounced entries is a free year of rent.
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