Money magazine lists six rookie landlord mistakes as follows:
No. 1: Underestimating costs
No. 2: Breaking the law
No. 3: Skimping on vetting prospective tenants
No. 4: Ignoring renters insurance policies
No. 5: Failing to check out the property regularly
No. 6: Going DIY at tax time
My take on these:
- I always estimate high on costs and low on revenue whenever I look at a property. If it still works then, I try and buy the place. That said, it looks like I've estimated low on both costs and rents overall, so I've done just about what I've expected (I will get a rental real estate update out sometime in the future).
- Having a management firm takes care of #2, #3, and #5 for me.
- I'm not sure about #4 where they recommend requiring tenants to have insurance for their contents. Does anyone do this (or have it required of them as a renter)?
- I do NOT go DIY at tax time. As you know, I use a CPA to do my taxes.
Those are my thoughts on this list. Anyone else have something to add?